BARCELONA Feb 25 Vodafone says that it
does not need to sell part of its stake in the highly profitable
Verizon Wireless joint venture in the United States to
bolster its position in Europe.
Speaking to reporters at the Mobile World Congress in
Barcelona, Vodafone Chief Executive Vittorio Colao said that the
British company had a healthy balance sheet and could invest
when it needed to.
Analysts have suggested that Vodafone, the world's
second-largest mobile phone operator, could reduce its 45
percent stake in Verizon Wireless to fund the purchase of assets
such as fixed-line companies to counter strong competition in
"The two things are not totally linked," Colao said. "Of
course, having a healthy balance sheet and a very profitable,
dividend-generating asset in Verizon helps.
"If it is right to make some investments, we will make some
investments," he added.
Vodafone has hired Goldman Sachs to advise on a
possible 10 billion euro ($13.2 billion) bid for German cable
operator Kabel Deutschland, a source with direct
knowledge of the matter told Reuters.
It has also been linked with possible deals in Spain.
Sector bankers and some analysts argue that Vodafone needs
to acquire fixed assets to fight off challenges from low-cost
mobile players and telecoms and cable rivals pushing discounted,
all-inclusive mobile and fixed bundles.
Buying its own fixed assets, such as local cable operators or
alternative telecoms providers, would help the company to keep
up with competitors' offers and cut fees paid for fixed access.
Vodafone, unlike its main rivals, is focused mainly on
mobile operations in continental Europe. So far it has pursued
only a modest approach to buying fixed assets country by
country, otherwise renting access to reach consumers' homes and
However, it may soon be forced into bolder action if
results start to suffer from what Goldman Sachs analysts have
called a "structural squeeze on mobile-only operators".
Though Vodafone's Colao emphasised the strength of the
company's balance sheet and healthy income from Verizon, he said
that he has an open mind about the possibility of changes in the
joint venture's ownership.
"I have always said the board keeps reviewing the Verizon
situation because it's big," he said. "And we have an open
The Italian executive added that he had seen consumer
confidence fall even further in his home country since October
because of political uncertainty as it awaits the results of
this week's national election.