Several of Vodafone's ten largest shareholders are demanding the company sells its 45% stake in Verizon Wireless and use the cash to improve the balance sheet. The Times Online reports that investors are frustrated that Verizon Wireless is independent of Vodafone's management, doesn't pay dividends and uses a different network technology (CDMA instead of GSM).
Vodafone said it would be wrong to sell Verizon when it was still growing strongly in a country where mobile usage remains under 70%, and Verizon also stood to benefit from market consolidation that has reduced the number of national mobile carriers from six to four in the past two years.
But investors complain they are receiving no benefit from the growing value of the American business. Some believe Vodafone should capitalise on the high price that Verizon Wireless would fetch, and sell its minority stake to its joint- venture partner, Verizon Communications.
It's estimated that Vodafone's stake in Verizon Wireless is worth $44.6 billion. The last time we covered a rumor that Vodafone was going to sell off its Verizon stake was when Vodafone was trying to buy AT&T Wireless nearly two years ago.
Wireless World: Enormous innovation, but big challenges
A record number of mobile phones were shipped last year, and analysts and investors are now saying that the promises made 10 years ago about the potential for the wireless economy are truly being realized. Still, some of the foremost investors and analysts tell United Press International's Wireless World that they are nervous that the United States may not maintain its competitive edge in the global information economy unless certain changes are made -- by federal policymakers and business leaders -- soon.
"There is enormous innovation in our economy -- no doubt," said James Melcher, founder of the New York City-based hedge fund, Balestra Capital Management, in an interview with Wireless World. "It's incredible. But there are problems. Why are countries with only 40 percent of the world's population (e.g., China) graduating ten times as many engineers and scientists as we are? Why are our schools pumping out so many lawyers? There is no value-added in legal work." By Gene Koprowski