Verizon Communications, part owner of Verizon Wireless, said this week they would like to increase their stake in the wireless arm. Vodafone, a major European carrier, currently owns 45% of the wireless venture. Vodafone could force Verizon to buy back all of its shares in VZW in the coming year for between $10 and 20 billion, however that is not the only way for Verizon to increase its stake. Verizon is hoping the two companies can come to an agreement for Vodafone to sell some or all of its shares.
Smart move on Verizon's part, but will Vodafone give in?
This is a very good move by Verizon to try to get 100 percent ownership of one of the best, most profitable, high flying wireless carriers in their hands and get rid of Vodafone, however, I don’t think Vodafone will be tempted that easily because of that same premise. On one hand, Vodafone will probably get $20+ billion for their stake in VZW, which they can help increase their properties worldwide or even go after another United States company or pay down some debt. They also won’t get any more income or say in Verizon wireless. On the other hand, if they continue to hold their stake, Vodafone will keep getting a big say and revenue in this great Verizon wireless company.
Should Verizon buy their shares, Vodafone could finally invest strongly into a GSM presence in the US like they have wanted to. This would definitely open up the floodgates for technology to enter the US for GSM. I would love it if some SK companies would come over here too and increase the CDMA evolution.
I think this is a difficult decision on the part of the combined parties because when they are combined they have a lot of capital and money to infuse into Verizon wireless, however, when they are separate especially if Verizon just owns Verizon wirel... (continues)