Verizon & Vodafone troubles

Verizon & Vodafone troubles

Worst case scenario : say Vodafone decides to back out of it's partnership with Verizon.
How bad do you think that could be for Verizon in the long run?


http://www.wirelessweek.com/index.a...00-00&verticalID=148&vertical=Industry+Trends

Vodafone hits low as Japan fears surface Warning over Far East subscriber numbers US partner Verizon incurs $ 2.5bn charge
Wednesday April 10 12:00am
THE DAILY TELEGRAPH(LONDON)

VODAFONE will have to take a huge charge on its investments in Japan, analysts said yesterday, after the country's leading operator said subscriber growth had collapsed.

NTT DoCoMo warned that it expected to add 30pc fewer subscribers this year, or 3.3m compared with 4.8m in the year to March.

NTT DoCoMo is the only operator in the world to have a fully functioning 3G network and the news puts added pressure on the new service to deliver earnings growth.

Vodafone is heavily exposed to Japan via its 70pc stake in mobile operator J-Phone and its 67pc stake in the fixed-line business Japan Telecom.

It is currently undertaking a review of all its assets in time for its preliminary results on May 28.

Vodafone shares slumped 5pc to their lowest for nearly four years. There was also a note from brokers at ABN Amro slashing their forecast price for the stock from 180p to 149p.

The news worsened when Vodafone's US partner Verizon said it was incurring a $ 2.5 billion charge in relation to overvalued telecoms assets.

One fund manager who has been reducing his holding in Vodafone said there were several fears surrounding the company.

"This is a mature business which has gone ex-growth like a utility," he said, "Only, unlike a utility, it faces huge costs to run out the 3G network as well as goodwill charges against flaky assets."

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