Vodafone Plans to Sell Verizon Stake

[WannabeMOTO]

Vodafone Plans to Sell Verizon Stake

Reuters
Saturday, January 4, 2003; 8:23 PM

LONDON (Reuters) - Mobile phone giant Vodafone Group Plc plans to sell its $20 billion stake in U.S. joint venture Verizon Wireless so it can fund a bid for complete control of a rival U.S. mobile operator, the Independent on Sunday said.

The newspaper cited U.S. sources as saying Vodafone had shown an interest in two mobile operators: Voicestream, which is part of Deutsche Telekom , and AT&T Wireless Services Inc , whose largest shareholder is Japanese operator NTT DoCoMo Inc <9437.T>.

Vodafone has an option to sell its 45 percent stake in Verizon Wireless to the majority shareholder, Verizon Communications . The newspaper put a $20 billion value on the option, saying the sale of the stake would provide the financing for any bid.

Currently, Vodafone only has a minority position in the key U.S. mobile phone market -- a point considered one of the most pressing issues facing its incoming chief executive, Arun Sarin, when he takes over from Chris Gent in July.

However, Vodafone told Reuters in December it had no intention of exercising its option and was happy with its current investment. The company was not immediately available for comment.

Deutsche Telekom, which is struggling under a heavy debtload, has said it does not need to sell Voicestream Wireless to meet its debt targets. But its chief executive has also said he would be open to a merger of the unit at the right price.

As for AT&T Wireless, main shareholder DoCoMo has come under pressure after the Japanese carrier said in October it would take a $4.7 billion writedown for the six months to September 30 on its investment in foreign operators. More than half of that figure was due to an impairment loss on its stake in AT&T Wireless.

But DoCoMo also vowed to stand by its partners and said it would proceed with its overseas operations in line with its original strategy.

($1=120.00 Yen)


© 2003 Reuters

[WannabeMOTO]

Vodafone: No Plans to Sell Verizon Stake

Reuters
Sunday, January 5, 2003; 9:37 AM

LONDON (Reuters) - Mobile phone giant Vodafone Group Plc. said Sunday that it had no current intention to sell its 45 percent stake in its U.S. joint venture Verizon Wireless.

"We have made it clear we have no present intention of exercising that option," a spokesman for the company told Reuters.

A report in the Independent Sunday newspaper said Vodafone was planning to sell its stake in Verizon Wireless so it could fund a bid for complete control of a rival U.S. mobile operator.

Both Voicestream, which is owned by Deutsche Telekom, and AT&T Wireless Services Inc were named as possible bid targets. The spokesman declined to comment on whether Vodafone had shown interest in either U.S. firm.

Verizon Wireless is a joint venture between Vodafone and Verizon Communications

[Rafale]

so who is right?

[jayc]

Both articles say they have no intention to sell it's stake in VZW.

[northform]

Vodafone isn't going to say it before they have a plan. Companies don't like to announce things that they aren't sure of.

[mcf04581]

I dont think that it will happen. I know for a fact that Qualcomm is currently working on a CDMA/GSM chipset that will work for the Verizon network as well as the Vodafone network. Things will end up working out for both companies, but I dont think that either will do anything at the current moment thw will not prove prospurous for both companies.

[northform]

The Boston Metro (the free paper that they distribute on the T) says that they have no intention of selling off, but they are probably just stratigizing. Vodafone execs probably don't know what they want to do (fully). Although the highly-publicized CDMA/GSM chipset from Qualcomm might quell their whinings, I doubt it. Qualcomm tech is generally more expensive, never mind something that is QComm and GSM. It would have to be priced competitively against regular GSM world phones and a majority of their customers would have to go for one of them for it to be of any value to Vodafone.

[Kenster]

Vodafone denies US sale report

The UK newspaper The Independent reported over the weekend that Vodafone is considering the sale of its 45% stake in Verizon Wireless in order to raise the funds to buy a rival GSM network. The newspaper cited unnamed USA sources as suggesting the company is looking to either launch a takeover for AT&T Wireless, or buy T-Mobile's US network from Deutsche Telekom.

Vodafone has a sale option on its stake, and could force Verizon Communications to buy out its stake in two transactions this year. The newspaper said that Vodafone would raise around US$20 billion from the sale.

The claim was later denied - and Reuters reported a Vodafone spokesperson as saying "We have made it very clear that we have no present intentions of exercising that option,"

With the transition of management from Sir Chris Gent to Arun Sarin - investors are looking forward to a period of consoldation in Vodafone's operations and less of the takeovers that charactierised Gent's time in charge. However, with Sarin's background in the US telecoms market, he may be inclined to push for one big deal to give Vodafone control of a network that would fit more closely with Vodafone's primarily GSM based holdings. Verizon Wireless is a CDMA based network - the only one in Vodafone's portfolio

[northform]

Maybe they're planning to buy up another 6% of Verizon Wireless and force them to switch to GSM (with 51% ownership they can make them change the name as well).

[mcf04581]

Verizon Communications would never sell that so sought after 6%.

[jmccrane]

Originally posted by: northform
Maybe they're planning to buy up another 6% of Verizon Wireless and force them to switch to GSM (with 51% ownership they can make them change the name as well).

They would have to shell out billions to switch to GSM. Not a good business decision for Vodaphone when the US has more CDMA subscribers than GSM subscribers, and most people don't really care either way.

[Kenster]

Here's the same response I made in another thread in the Western forum...

Technology is only part of the reason why Vodafone has a vested interest in Verizon. Verizon is the biggest player in the US and so that is a highly sought after piece. There will probably be opportunities for interoperability when the wCDMA & CDMA2000 compatible chip is developed.

But I believe wCDMA is much more difficult to implement which is why Japan had a hell of time trying to implement this. If you compare wCDMA versus 1xEV-DO at the 1Mbps range, 1xEV-DO is much more sprectrally efficient and backwards compatible with CDMAONE and CDMA2000 1x.

Don't forget about 1xEV-DV. Read the following:

In addition to CDMA2000 1xEV-DV, the CDMA2000 family of standards includes CDMA2000 1X and CDMA2000 1xEV-DO, which already have been recognized by the ITU as 3G technologies. CDMA2000 1X is commercially available on 14 wireless networks, while CDMA2000 1xEV-DO has been launched on two. There were more than 8.7 million CDMA2000 subscribers worldwide at the end of April.

"CDMA2000 leads in 3G subscriber numbers, product availability, services and technology innovation. The TIA's approval of CDMA2000 1xEV-DV further strengthens the industry's recognition of CDMA2000 as the standard of choice for 3G."

As specified by the 3GPP2, CDMA2000 1xEV-DV will provide integrated voice with simultaneous high-speed packet data services, such as video, video-conferencing and other multimedia services at speeds of up to 4.8 Mbps. CDMA2000 1xEV-DV is backward compatible with cdmaOne(TM) and CDMA2000 1X, providing wireless operators a seamless network evolution.

1xEV-DV will be spectrally efficient by squeezing data & voice together. I don't see anything out there for the wCDMA guys doing this. When comparing mbps versus mbps, the cdma2000 camp is much more sprectrally efficient. And it's no secret that Europe is having a damn hell of a time trying to implement wCDMA, whose voice infrastructure is still based on GSM.

Don't forget too that CDMA2000 is growing, by year-end I believe we will have an additional 20 or so CDMA2000 carriers around the world. The western hemisphere already has or will be by year-end, full of CDMA2000 networks in countries such as Canada, US, Mexico, Panama, Dominican Republic, Peru, Chile, Equador, Colombia, Brazil, etc. Colombia and Brazil were the latest carriers to recently offer cdma2000 1x. Interestingly, the BellSouth wireless carriers in latin america are going with CDMA2000 and are not following the big-daddy BellSouth USA of wCDMA.

Everyone is right in that GSM dominates, BUT we all know that CDMA2000 is currently dominating the 3G scene in 2 key countries: Japan and South Korea. It's no contest. And there's a carrier in Indonesia that just recently announced they are ready for CDMA2000 implementation.

In addition to the 20 or so new CDMA2000 based networks coming our way this year, you also have to consider something as well. Even though GSM dominates right now, only a small percentage of users in China and India use cellphones. China and India have a combined population of about 2 billion people! The number of GSM users in China and India is only a drop in the bucket. I was just talking to a former Motorola mgr (visiting Chicago this week) and whom is helping a wireless carrier in India to spearhead their new CDMA network. He said that the rate plans were really cheap - works out to about 1 cent US per minute plus they get free incoming calls. The company is ready to launch in Q1 of this year. The projection is that in only a few years, the CDMA customer base will vastly outnumber the GSM base in India and in 5 years, the projection is that the customer base will skyrocket that of GSM users. China and India are still in the infancy stages of wireless usage and have a huge potential. From what I'm hearing, India has the opportunity to follow the path of South Korea, whereby the CDMA2000 camp is killing the other camp. With the western hemisphere full of CDMA2000 carriers and Asia concentrated with a huge CDMA2000 user base, the economies of scale arguments for wireless devices and technology will not favor the GSM/wCDMA camps nearly as much as you may think.

[roamer1]

Regardless of how much Voda owns of VZW, Voda has NO voting interest in VZW -- and can have none because they are a foreign company, per US law.

-SC

[ockidd15]

well, that's that. hehe.