Vodafone Won’t Rule Out Selling Stake in Verizon Wireless

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November 15 2012 @ 15:58

Vodafone’s CEO said he won’t rule out saying so long to Verizon Wireless, the company’s joint venture with Verizon Communications Inc.

Although Vittorio Colao said he’s satisfied with the Verizon partnership for now, according to Bloomberg.com, he doesn’t count on dividends from the asset to fund shareholder payouts. He also said dividends from Verizon are “an extra layer of comfort.”

Owning 45 percent of Verizon Wireless, Vodafone’s payout share is $3.83 billion. Verizon Wireless, which owns the other 55 percent, must pay $8.5 billion to its parents, the article said. Because the payout is not guaranteed, Vodafone must negotiate each year, which causes uncertainty among investors.

Colao said the investment is reviewed by Vodafone’s board twice per year, and right now, the company remains happy with its partnership. Last quarter, Verizon Wireless added 1.54 million net contract customers and increased revenue by 7.3 percent to $19 billion.

Vodafone is trying to generate extra revenue with more expensive unlimited plans, the article revealed, and with premium charges for faster 4G services.

More mobile customers are moving to higher priced services since Vodafone released its Red plans with unlimited voice and text, Colao said. If customers continue to trade up rather than down, it could increase average monthly bills and generate more revenue.