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Would Vodafone Sell Its Stake in Verizon Wireless?

Global telecom provider Vodafone Group PLC has been executing on a strategy to sell minority stakes around the world.

The London-based company recently sold stakes in Japans Softbank and China Mobile, and the Wall Street Journal reported that Vodafone plans to shed its interests in France-based SFR and Polkomtel in Poland.

Is Verizon Wireless next?

Vodafone owns a 45 percent stake in the growing and highly profitable U.S. mobile operator. But as Rethink Research wireless analyst Caroline Gabriel noted, Anger had mounted about the failure of the Verizon Wireless venture to pay a dividend, and [Vodafone] shareholders were increasingly asking for minority stakes round the world to be sold off to generate cash.”

Gerard Kleisterlee, who will take over as chairman of Vodafone Group in July, must decide what to do with Verizon Wireless, according to the Journal.  

Meanwhile, the U.S. carrier is widely expected to resume dividend payments later this year or in 2012.  That could double Vodafones free cash flow, the Journal reported.

If shareholders receive dividend payments, the pressure on Vodafones management to squeeze value out of Verizon Wireless could diminish.

But Gabriel wrote that Vodafone is expected to accelerate its strategy to shed its minority interests under Kleisterlee. In September, Vodafone was restructured into two regional divisions, a European division and a non-European division, the analyst noted.

On Thursday, Vodafone reported its fifth consecutive quarter of revenue growth, boosted partially by 7 percent growth at Verizon Wireless.


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