Broadband and wireless buoy Verizon in fourth quarter as the carrier stands ready to buy out Vodafone.
Verizon Communications, the United States’ second-largest carrier, is ready and waiting to buy Vodafone’s stake in Verizon Wireless and would even finance the deal that could give Vodafone $44.6 billion.
Speaking to analysts after Verizon released its latest financial statement, chief executive Ivan Seidenberg said Verizon "would not shy away" from acquiring Vodafone’s interest in the wireless operation. Verizon owns the remaining 55 percent of the wireless unit.
We would clearly be interested in increasing our ownership of Verizon Wireless, said Mr. Seidenberg. Verizon Wireless has gone through an extraordinary run and created value for both sides. If the opportunity came to be, we would stand ready to work with Vodafone.
The situation has arisen because Vodafone is considered a possible acquirer of AT&T Wireless. Vodafone’s management has not ruled out making a bid for AT&T Wireless in the auction that has a deadline of Feb. 13 for submissions. If Vodafone were to acquire AT&T Wireless or a portion of the firm, the U.K.-based firm would likely be required by regulatory agencies to sell its interest in Verizon Wireless.
Vodafone is the world’s largest mobile-phone service provider, and an acquisition of AT&T Wireless would enable it to run a major U.S. mobile-phone arm. A deal with AT&T Wireless would be sweetened because both firms use the same underlying GSM technology; Verizon Wireless uses a competing CDMA-based infrastructure technology.
Verizon Wireless added 2 million net new customers during the fourth quarter, representing a 21 percent increase over the corresponding quarter in 2004.
Verizon Wireless’ revenues were $8.7 billion in the quarter, an 18.3 percent increase compared with $7.3 billion in the fourth quarter of 2004. The company credits the increase to growing demand for data services. Full-year 2005 wireless revenues were $32.3 billion, an increase of 16.8 percent compared with 2004.
Broadband Increases
The carrier added 613,000 wire-line broadband connections during the fourth quarter of 2005, giving the company 5.1 million broadband subscribers. During 2005, the carrier added 1.7 million customers, which represents a growth rate of 47.6 percent compared with year-end 2004.
Revenues from DSL and FiOS data contributed to total wire-line data revenues of $2.2 billion in the fourth quarter of 2005, a 9 percent increase compared with the fourth quarter of 2004.
The company said it was deploying or selling FiOS fiber-to-the-premises (FTTP) broadband data services in 16 states, passing 3 million homes and businesses. In markets where Verizon has been selling FiOS data services for at least nine months, the average penetration rate at the nine-month mark was 14 percent.
At the analysts meeting, Seidenberg said Verizon was happy with its existing relationship with Vodafone. And Vodafone has said it, too, is happy with its 45 percent minority stake in Verizon Wireless and the robust dividends the profitable unit provides.
Verizon Wireless’s revenue reached $22.5 billion for 2003, and the firm has been adding new subscribers at a high rate.