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Verizon-Vodafone Vagaries

Verizon Communications Inc. (NYSE: VZ) has bid $38 billion to buy out Vodafone Group plc (NYSE: VOD)'s share in Verizon Wireless, but Vodafone has rejected the offer, wanting to hold out for $50 billion, London's Daily Telegraph reported today.

Verizon Wireless , a joint venture between the two companies, is the second-largest wireless carrier in the United States.

Officials at Verizon and Vodafone declined to comment on the report. However, Verizon officials have publicly stated that they want to buy Vodafone's stake.

"We still remain interested in purchasing the 45 percent that Vodafone owns of Verizon Wireless," said Ivan Seidenberg, Verizon's chairman and CEO, in an earnings call with analysts earlier this month. "The decision is really more in their court at this point." (See Verizon: Wireless Funds Fiber.)

Owning all of Verizon Wireless would well behoove Verizon in terms of competition. In March, Verizon's competitor AT&T Inc. (NYSE: T) announced plans to buy BellSouth Corp. (NYSE: BLS) for $67 billion. (See AT&T, BellSouth to Merge.) The merger, due to close by March 2007, gives AT&T full control of Cingular Wireless , which is jointly owned by AT&T and BellSouth.

Cingular became the largest wireless carrier in the U.S. after acquiring AT&T Wireless in 2004 for some $41 million. (See Cingular Buys AT&T Wireless.) Cingular beat out a bid from Vodafone, which had tried to buy AT&T Wireless for $38 billion -- the same amount that Vodafone is now reportedly rejecting.

— Carmen Nobel, Senior Editor, Light Reading

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