Lowell McAdam, CEO of Verizon Communications, said the company has the financial firepower to buy the 45 per cent in Verizon Wireless it does not already own, a reiteration of its long-standing interest in such a deal.
“I think [a deal] is feasible,” McAdam told the Wall Street Journal. “Our wireline business is getting strong and, as that gets stronger, it makes it easier.”
Verizon’s interest in acquiring the 45-per-cent stake in Verizon Wireless held by Vodafone is long-stated.
“We have always said we would love to own all of that asset,” said McAdam, who is attending the 2013 CES event in Las Vegas.
One question mark over any possible deal has always been the price tag for Vodafone’s stake, which could be worth as much as $100 billion.
A stronger financial performance by Verizon’s fixed-line business improves its chances.
There are also alternatives to an outright sale, a pointed alluded to by McAdam who commented there are “lots of different ways we could do it”.
Verizon Wireless made its first dividend payment to Verizon and Vodafone in 2012 after years of not distributing any funds.
Lowell said that Verizon Wireless signed a further 2.1 million retail postpaid subscribers in Q4, 2012, of which about 87 percent were smartphone users.
Smartphone activations in the full-year were 15 percent higher than 2011.
However, the resultant higher subsidies for smartphones means the company expects a near-term negative impact on EBITDA service margin.
In addition, fixed-line operator Verizon expects to report a pre-tax charge of between $7 billion and $7.5 billion which relates mainly to the remeasuring of pension and post-retirement liabilities.
Finally, Verizon estimates the cost of “superstorm sandy” will be about $1 billion, a figure which is split roughly 50-50 between operating expenses and capex. However, about one third of the total will be recovered by insurance claims.