29
Aug
Verizon-Thumb

Verizon is perhaps the most intimidating fish in the sea of US cellphone carriers (okay - it's more of a pond). Now the Big Red is in talks to buy Vodafone's 45% stake in the company for $130 billion, and signs suggest that this deal could be completed within a week. If this goes through, it will mark the closure of a deal Verizon has wanted to secure for years.

Verizon-Vodafone

If you aren't familiar with Vodafone, it's a British company with roughly four times the number of subscribers that Verizon has and the largest mobile network operator outside of China. Verizon has had the ability to buy out Vodafone's stake for quite a while now, but the latter has been reluctant as such a deal would trigger a tax bill that could top $10 billion and could leave the company more subject to the whims of Europe's troubled economy - which, if you haven't been paying attention, makes the US economy look relatively charming. Still, that doesn't mean the company is too afraid to compete.

Times are changing. Rising interest rates could make it more expensive for Vodafone to stall the deal any longer. And while the company's stake in Verizon has been a valuable asset, signs show increasing competition from Sprint and T-Mobile. The success of those companies could reduce the value of Verizon's brand, at least in the eyes of shareholders. Customers have different reasons for begrudging the company, but that's a story for another day.

Via: The Wall Street Journal

Bertel King, Jr.
Born and raised in the rural South, Bertel knows what it's like to live without 4G LTE - or 3G, for that matter. He now lives in the City of Bridges, adjusting to the presence of actual snow. His phone of choice is the HTC One.

  • Kit Tihonovich

    RIP happy Vodafone customers.

    • Shitiz Garg

      Why? They're not buying Vodafone, they're buying back the Verizon that Vodafone owns.

      • Kit Tihonovich

        Derp, didn't read the whole thing. Disregard.

        • Tony Sarju

          Oh you

    • Keade

      It's not like they are going to lower their prices, this deal will make no difference to the customer.

    • Shitiz Garg

      Why? Verizon is not buying Vodafone, it's buying back the Verizon that Vodafone owns

    • Roh_Mish

      Reading all those opinions of verizon customers, I would get mad if verizon came here in India. Vodafone is the best carrier here in India if not around the world.
      But thats not true. Verizon is buying back the stakes Vodafone holds in Verizon Wireless.

  • http://www.androidpolice.com/ David Ruddock

    $130 billion, huh?

    Headline, two weeks from now: Verizon To Begin Charging Extra For Phone Chargers, USB Cables, SIM Cards, Speaking To A Human Being In A Store.

    • Bob G

      You mean, they already don't?

      • Paul

        In germany.... not yet.

      • Mike Harris

        I was wondering the same thing. I've never been able to get free accessories from them. I think he meant "Begin Charging Extra to Use..."

        • RaptorOO7

          special chip in all Verizon products that require you to use THEIR approved accessories and if you don't it won't charge, work and will shock you.

    • myrna652

      like Eric answered I'm stunned that any one able to get paid $7290 in one month on the internet. he said w­w­w.K­E­P­2.c­o­m

    • John O’Connor

      That is a lot of additional debt to carry for any company! It's not like Verizon has $130B in the bank, hell Apple has the most cash and equivalents (of any major company) sitting around doing not much of anything. I don't see how this would be beneficial to stockholders or customers in any regard, especially an entry into the beleaguered EURO markets.

  • ArberBeq

    I highly doubt that they'll buy it for 130billion. Maybe 50-60bill max

    • Shitiz Garg

      As if Vodafone's gonna sell it for $50-60B

    • Evan Knofsky

      Except that 45% in stock is valued at 110-130billion

  • Jeremy MacMull

    Vodafone's 45% stake in Verizon has been valued for a long time as between $100 and $130 billion so they will not likely take anything below that. Secondly Verizon is a really small fish compared to Vodafone and a minnow compared to China Unicom (I think thats their name)

    This website is US centric so people think the US carriers are huge when actually they are not so exciting or big.

  • Jose Torres

    What would Verizon stand to benefit for buying the rest of itself, so to speak?

    • Matthew Fry

      That's the question I had.

    • Asphyx

      It's all the rage with Tech companies these days, Even Apple is considering buying back it's stock to have greater control over it's Stock Value
      The less stock that's out there to be bought the less volatility in the price.

    • RaptorOO7

      They would gain full control of Verizon Wireless and undoubtedly there are reasons behind wanting full control. Even though they have majority control its not full control. They could be contractual relationships with using Vodafone when going overseas or some other crazy reasons.

    • Andrew Hannaford

      I they do this it would give them the ability to expand into Canada. Something the deal with Vodafone would not allow.

  • JPB

    Wondering if Verizon will then drop the "Wireless" from the name since they'll be 100% wholly owned?

    • squiddy20

      Wut?

    • abqnm

      AT&T did it. If the Vodafone buyout goes through, I am sure it will happen at some point, but not in the very near future.

  • duke69111

    I wish Verizon would buy US Cellular.

    • enomele

      That sounds like a terrible idea. If I lived 2 hours south I would be using US Cellular and be super happy not to be using Verizon. Verizon would ruin a good thing.

  • http://www.androidpolice.com/ Artem Russakovskii

    Well, that's surely the most expensive steak I've heard of. I hope they leave a tip.

  • Roh_Mish

    If vodafone owned Verizon then i don't think people would complain.
    It is the best network here in india atleast. While i see screenshots of people in us having just one bar reception on a nexus 4 on 3G, i get full bar and DC-HSDPA internet.

  • abqnm

    And Samsung is worried about a measly $1bn...

  • Miles

    Reading the WSJ article makes me think that this signals more problems for the UK and Europe than anything else.

    With Vodafone having loads more money to spend that means they will try to buy more European assets and creep towards the US model which to me often seems like a monopoly outside of major metropolitan areas.

    To quote the WSJ:

    "The upshot could be an acceleration of the pace of change in Europe's
    troubled telecom industry. Across the European Union, there are far more
    than 100 mobile and fixed-line operators owned by a jumble of more than
    40 major corporations, according to data from consultancy IDATE. That
    compares with just four big mobile operators in the U.S., where the
    cable-TV and broadband business is consolidating, too. As a result,
    revenue and profit at many European telcos has been falling in a
    stagnant economy."

    The thing is this is better for consumers, tough luck to the providers:P

    • Sean

      Vodafone did purchase Kabel Deutschland for €7.7 billion and already offer cable services through Deutsche Telekom's fiber so I wouldn't be surprised if that expanded. Virgin Media are the only "quadruple play" company in the UK at the moment. And what with their £1.04bn acquisition of Cable and Wireless Worldwide, I wouldn't be surprised this comes as an option.

  • Kellic

    Hope the Gov blocks this. Verizon is already big enough, already an asshole enough, already arrogant enough. If anything we need the smaller players like T Mobile or Sprint to do this. Not V.

  • Marty Lange

    This sounds like a good thing to all parties involved. My only concern would be another increase in the monthly bill. As for complaints about Verizon... I have no clue what you could possibly mean. Seriously. I've yet to have a problem with them that warranted a complaint. Though I do wish they could push a Verizon PRL to my phone...