Vodafone to hold onto Verizon stake

Vodafone on Thursday hinted that it would prefer to hold onto its stake in US cellco Verizon Wireless, despite shareholder calls to offload the asset.

Arun Sarin, chief exec of Vodafone, said Thursday that the value of the Verizon stake had increased from $10bn to $15bn in 2006 and would continue to increase. He said that the operator is looking at ways to maximise the value of the holding for shareholders and hinted that the holding would be in a position to pay dividends from 2009.

Sarin’s stance goes against calls from rebel Vodafone shareholders demanding a shake up of the operator’s capital structure and the offloading of the Verizon stake. Earlier this week, US-based shareholder advisory group, Glass Lewis, recommended that US investors in Vodafone lend their backing to the majority of the proposals submitted by activist investment group Efficient Capital Structures (ECS). Vodafone is required to put the resolutions to its shareholders at its forthcoming AGM on July 24.

The news that Vodafone will hold onto the Verizon sake came as the company reported quarterly results for the three month period to the end of July. In the US, Verizon Wireless added 1.3 million net customers, including 1.6 million retail net additions and 300,000 reseller net disconnections.

Group revenue for the quarter ended June 30 reached £8.3bn, representing 7.5 per cent growth on last year with 9.1 million proportionate organic net mobile additions compared with 4.8 million for the same quarter last year. The operator’s total proportionate mobile customer base reached 232 million at the end of June, with 2.6 million 3G devices added in the quarter, bringing the total 3G device base to 18.5 million.