British telco Vodafone is working on closer ties with Verizon that could result in the resumption of dividends from their mobile operator JV, Verizon Wireless, according to a report in the Sunday Times.
Vodafone declined to comment on the dividend report…
British telco Vodafone is working on closer ties with Verizon that could result in the resumption of dividends from their mobile operator JV, Verizon Wireless, according to a report in the Sunday Times.
Vodafone declined to comment on the dividend report but told TelecomFinance: “We are engaged with Verizon to leverage our existing relationship to provide benefits for both companies.”
Verizon Wireless spokesman said that there would be no dividends in 2011, but they would reassess later this year whether to have dividends in 2012.
Vodafone holds a 45% stake in Verizon Wireless, with Verizon holding the rest.
The Sunday Times also reported that Vodafone and Verizon were looking at ways of sharing parts of their enterprise divisions and buying network equipment together, according to newspaper reports at the weekend.
Vodafone did not confirm these rumours, but said that any plans were at an “embryonic” stage.
A Verizon spokesman said that the two companies had formed a joint global operations team, which was looking at the provision of IT communications and integrated solutions, particularly for multinationals.
This would include technology development and procurement initiatives.
Verizon initially suspended dividends to Vodafone in 2005, citing the large debt burden of Verizon Wireless, which had recently acquired its US rival Alltech for US$14bn.
But some commentators argued that the move was an attempt by Verizon to push Vodafone out of the JV.
According to the Sunday Times report, relations between Verizon and Vodafone have improved since the appointment of Lowell McAdam as the COO of Verizon. McAdam had previously been the head of Verizon Wireless.
McAdam is reportedly seen as the leader-in-waiting at Verizon. The current CEO, Ivan Seidenberg, has reportedly led the campaign to get Vodafone to leave the JV.
Seidenberg said at an investor conference in December that he hoped to hold talks with Vodafone on the issue of resuming dividends in late 2011.
At the UBS Global Media and Communications Conference in New York, Seidenberg said that he agreed with Vodafone CEO Vittorio Colao that the “next meaningful conversations about the distribution of cash come at the end of 2011”.
He added that “at current course and speed, we should have a discussion next year about what happens in 2012 and 2013”.
