Vodafone Group Plc shouldnt count on receiving a hefty dividend payment each year through its 45 percent stake in Verizon Wireless.
Verizon Communications CEO Lowell McAdam says it’s unrealistic to return to a recurring, multiyear dividend policy because Verizon Wireless may want to acquire competing businesses in order to secure more spectrum. McAdam made the comments to The Financial Times. Verizons rival, AT&T, has cited the need for spectrum as one of the reasons for its pending $39 billion acquisition of T-Mobile USA.
Verizon the majority owner in Verizon Wireless, the largest U.S. mobile operator with 106.3 million wireless connections will examine the dividend payment annually, McAdam said.
Over the summer, Verizon Wireless announced the first dividend payment in six years: a $10 billion payout to its owners with $4.5 billion going to England-based Vodafone early next year.
Basking Ridge, N.J.-based Verizon Wireless isnt exactly hurting for money. In the second quarter, wireless revenues climbed 10.2 percent to $17.3 billion while Verizon Wireless posted operating income of $4.69 billion. Last year, the wireless giant brought home $18.7 billion in operating income on annual revenues of $63.4 billion.