Vodafone CEO Vittorio Colao faces numerous challenges as he tries to streamline his company's operations around the world. One of the trickiest tasks Colao has to contend with is what do about Verizon Wireless (NYSE:VZ), in which Vodafone holds a 45 percent stake (Verizon Communications owns 55 percent of the carrier).
The issue has been a perennial hot-button topic between Verizon Communications and Vodafone, and Colao insisted that the companies need to come to some kind of conclusion. Verizon Wireless has not paid a dividend to Vodafone since 2005, and has instead focused on paying down debt. Verizon executives have hinted Verizon Wireless may begin paying a dividend again once its debt is paid down.
Verizon Wireless "has almost no debt. It will have no debt by the end of [next] year," Colao said in an interview with the Wall Street Journal. "At that point something has to be decided."
There are three main options: Verizon buys Vodafone's stake, Vodafone and Verizon merge, or Verizon Wireless starts paying a dividend. Verizon CEO Ivan Seidenberg said earlier this spring that a merger did not make sense for the companies.
Colao said Vodafone and Verizon Communications should work more closely together. "But whether 'act more together' means that you need to merge, or just cooperate, again this will depend a lot on the specific situation," he said. Verizon, meanwhile, reiterated that it is interested in eventually buying out Vodafone's stake.
In other Verizon news, Verizon Communications CFO John Killian announced he will retire at the end of the year after 31 years with the company. Verizon did not immediately name a replacement, but said one will be named soon. Verizon Wireless last week named Andrew Davies as its new CFO.
Report: Vodafone talking to shareholders about Verizon's future
Verizon CEO down on Vodafone merger, but open to iPhone
Report: Verizon, Vodafone remain in talks on VZW's fate
Rumour mill: Vodafone, Verizon merger more likely, claims analyst
Vodafone CEO: We need to resolve VZW issues