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Verizon CEO says Wireless takeover is "feasible"


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.

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  • Paul Warner

    This would make good sense. I always wondered why British Vodafone a GSM carrier bought into a US CDMA carrier. No roaming between the two..

    • klay12

      Are you really asking why Vodafone made an investment in Verizon which is an a profitable and sound investment? The GSM V CDMA issue is a complete irrelevance as is the roaming one.

      Companies buy into things for lots of reasons and its not all about roaming or technology.

    • Gregg Lebovitz

      I am also puzzled by your comment as to its relevance to Vodafone’s investment. If you look back to 1999, the time of the investment, there were few if any national carriers in the U.S. Verizon was newly formed from the merger of GTE and Bell Atlantic and was well positioned to develop a National footprint. The alternatives were region carriers. AT&T and Cingular were still non GSM TDMA and fragmented with low subscription rates and high costs.

      The only GSM carriers were small regional operators with low subscription rates. If you wanted to penetrate the National U.S. market, a partnership with Verizon to build out a strong National network was the best option. The alternative was to abandon the U.S. market. We see what that did for Nokia. It opened the door for Apple to introduce the iPhone into the U.S. market with little or no competition.

      At this point, it would not make sense for Vodafone to divest themselves of Verizon based on compatibility. The U.S. market has two GSM providers that can service Vodafone GSM customers.