Vodafone & Verizon Butt Heads

When Verizon was formed from a the consolidation of a variety of telcos there was a need for a cash infusion to bring the company together, and Vodafone PLC of England was in the throes of a global expansion fueled by the cash-rich boom times. Vodafone ended up with a 45% non-controlling stake in the largest US wireless carrier. Vodafone’s long term goal was to gain wireless operations in many nations, and achieve portfolio diversification and economies of scale in operation. I’m of the opinion that Vodafone has been far too slow to extract these economies of scale in its 28 regional operations, but that they are finally executing on the promise, as can be seen with the re-branding of J-Phone in Japan and with the pan-EU Live! data service. But at every turn, Verizon wireless has balked at guidance from Vodafone. The US operation is ardently independent, and industry rumblings of discord between them have been heard since the first. That’s why when Deutsche Telekom’s debt burden was near the breaking point last year, there was speculation that Vodafone would sell their stake in Verizon, and pick up the American T-Mobile GSM network from the cash-starved DT. This made lots of sense since Verizon’s CDMA is largely incompatible with Vodafone’s mostly GSM holdings. That didn’t happen, so the profitable yet unhappy marriage continues. There’s the history, now here’s the current story that discusses a mounting public war of words between the two. The linked story is fun because it is an Australian publication with a Paris, France dateline on a story regarding British and American companies. Now that’s a global opinion on the matter.

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