Vodafone is forging closer ties with Verizon, its American partner, that could yield billions of pounds in savings on top of a long-awaited resumption in dividends from their joint telecoms venture.
Vodafone is expected to provide details of the plans in May as it moves closer to striking a deal to extract a dividend from Verizon Wireless for the first time since 2005.
The pair are examining plans to pool parts of their enterprise divisions that serve multinational clients, as well as buying network equipment together. The accord suggests efforts by Verizon to buy Vodafone out of Verizon Wireless, where the UK group has a 45% stake, have cooled for now.
Vodafone is also close to disposing of its stake in the French firm SFR. Vittorio Colao, Vodafone’s chief executive, has set a target of the end of the month to do the deal, in which its 44% stake would be sold for £7 billion to Vivendi, its French partner. Some of the proceeds could be used to buy Verizon’s minority stake in Vodafone Italy.
Relations have warmed between Vodafone and Verizon since October, when Lowell McAdam, the boss of Verizon Wireless, was promoted to become Verizon’s chief operating officer and heir apparent to Ivan Seidenberg. Seidenberg had led a campaign to persuade Vodafone to sell its stake or merge with Verizon.
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“We have a great opportunity to extend our global reach and scale through our partnership with Vodafone,” McAdam told analysts in January.
Bernstein Research thinks that restarting dividends at Verizon Wireless will fund a 45% rise in Vodafone’s payout.