Vodafone CEO Vittorio Colao said that his company needs to work with Verizon Communications to resolve issues related to their joint venture, Verizon Wireless, in order to boost Vodafone's share price.
"We need to solve the U.S. situation," he said at the Morgan Stanley TMT conference in Barcelona, without elaborating. Vodafone holds a 45 percent stake in Verizon Wireless, which has not paid dividends to Vodafone since 2005. According to the Financial Times, Verizon has urged Verizon Wireless to use its profits to pay down its roughly $32 billion of debt--$10 billion of which is owed directly to Verizon--instead of paying dividends. The action, according to the FT, could help Verizon pay less if it were to eventually acquire Verizon Wireless outright.
Colao has said in the past that he is happy with the relationship Vodafone has with Verizon regarding the wireless company, but that Vodafone's board is always reviewing it.
In April, Verizon CEO Ivan Seidenberg said that his company likely would not increase its 55 percent stake in Verizon Wireless. "I would like to own the whole thing, but we don't have to," Seidenberg told the Wall Street Journal during a wide-ranging interview. He said said he thinks Vodafone may eventually sell its Verizon Wireless stake as wireless growth slows.
Verizon Wireless spokesman Jim Gerace said that the partnership is still strong, but did not provide any specific response to Colao's comments. "I think you need to talk to them by what they meant by 'solve the issue,'" he told FierceWireless. "The partnership continues to be very strong and is working well."
A Vodafone spokesman also handed off the issue.
"I don't think it really requires much clarification," Bobby Leach, director of communications for Vodafone, told FierceWireless. "The situation with Verizon and Wireless has not changed. We have a very good relationship with Verizon. Quite clearly, from our point of view, it would be advantageous if it were possible to monetize our investment. However, we fully recognize that the priority right now is to pay down debt and that [is something] we have always recognized."
For more:
- see this Financial Times article
- see this Reuters article
- see this Dow Jones Newswires article
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