This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: For Verizon, Fewer Hang-ups This Time Around

Stocks in this article: VZ VOD

NEW YORK ( TheStreet) -- Talks between Vodafone Group (VOD) and Verizon Communications (VZ) over their U.S. wireless joint venture are practically a semi-annual event. Vodafone has been a willing seller of its minority stake in Verizon Wireless, and its New York partner a willing buyer, for a decade or so.

The potential for rising interest rates may increase the urgency for Verizon to get a deal done. While rates are still historically low, a purchase of Vodafone's 45% could still be accretive at a price of $130 billion. Changes in Vodafone's perspective may also make a deal more likely this time around.

"Vodafone needs money," if the U.K. wireless carrier wants to continue its strategy of combining wireline and wireless networks in Europe, said Roger Entner of Dedham, Mass., consultancy Recon Analytics.

Vodafone in June agreed to buy Kabel Deutschland Holding for ¿ 7.7 billion ($10.1 billion). A mega-payout from Verizon would give the London telecom an unrivaled war chest to consolidate other markets.

"They would have deeper pockets than everyone in Europe, than anyone in the world," Entner said, "and all they do is get rid of a noncore market." While it would be a regulatory impossibility, Entnet noted, in most European countries Vodafone could buy every single wireless carrier if the regulators would allow them.

Craig Moffett of Moffett Research suggested in a Thursday note that a diminished view of the U.S. wireless market could motivate Vodafone to exit the profitable JV. The U.S. market's revenue growth and margins may be the most attractive among developed countries, he noted, even with four national carriers.

"There is little prospect for things getting materially better for Verizon Wireless," he wrote, "and a meaningful chance that things get worse."

Vodafone's experience in Japan could inform its view of the U.S. In 2006, the company sold its Japanese carrier to SoftBank, whose chairman and CEO Masayoshi Son has ignited competition and lowered prices. Softbank has, of course, just taken a controlling stake in Sprint (S) and rolled up the carrier's control of Clearwire.

"Vodafone's management may be looking at the U.S. and saying to itself, 'We've seen this movie before,'" he wrote.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,584.33 +227.46 1.31%
S&P 500 2,043.49 +30.60 1.52%
NASDAQ 4,716.9290 +72.6170 1.56%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs