Optical/IP Networks

Vodafone Hangs On to Verizon Stake

Defying months of intense rumor and speculation, Vodafone Group plc (NYSE: VOD) will not flog its 45 percent stake in massive U.S. cellular operator Verizon Wireless , according to the man who may have most wished for such a sell-off -- the CEO of Verizon Communications Inc. (NYSE: VZ), Ivan Seidenberg.

The Verizon big cheese said on Verizon's quarterly earnings call Tuesday that Vodafone CEO Arun Sarin recently told him that the British cellular giant is "extremely pleased with their position in the partnership."

Sarin's comments may be less pleasing to the Verizon top brass, however. In the face of rapid consolidation in the U.S. wireless market there has been rampant speculation about Verizon trying to buy out its partner. It was reported in March this year that the operator had informally offered $40 billion for Vodafone's slice of the wireless pie.

Verizon Wirless has, however, largely proved to be a nice little earner for Vodafone even as the operator has been selling off some of its assets in other parts of the world. Despite increasing pressure, Vodafone has never really shown any keen interest in a sell-off. (See Vodafone Sticks With Verizon.)

It's not hard to see why.

Verizon Wireless's revenue in the quarter rose 18 percent to $9.3 billion even as the operator's net income declined 24 percent to $1.61 billion. The wireless business raked in $1 billion from wireless data alone.

Verizon shares were down on the news that Vodafone isn't selling, dipping 55 cents, or 1.63 percent, in late afternoon trading.

— Dan Jones, Site Editor, Unstrung

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