Vodafone ignores brill opportunity

APOLOGISTS FOR Vodafone's current management appear adamant that the company's continuing 45 per cent holding in Verizon Wireless is justified. They seem blind to the missed opportunities.

Admittedly the stake in Verizon has risen in value and current estimates are that it is worth around $50 billion. The defence is that to sell the stake would create an enormous tax bill.

That would surely only apply were Vodafone to try to pull the money back to sunny Blighty. The alternative is so blatant that the INQ wonders why Vodafone continues to ignore it.

Go to the GSMA's web site and you can count almost one hundred US companies capable of offering a GSM service. Most of these are small companies. They certainly don't possess much of a brand either.

What Vodafone could do is buy up these small companies and make use of its purchasing power to obtain favourable pricing on handsets. Plus it could get favourable pricing on infrastructure too.

Building out W-CDMA/3G networks would, of course, be expensive. But there's a wonderful opportunity staring everyone in the face.

If Broadcom gets its way and imports of CDMA2000 handsets containing Qualcomm chips dry up, then W-CDMA will have a brilliant marketing opportunity. And Vodafone has a brand name too.

There is even a precedent. One of the other big mobile network operators has admitted that it can get a 50 per cent discount from its suppliers because of its purchasing power. That operator was, of course, China Mobile.

Amalgamating all the little US GSM operators together therefore makes a great deal of sense. All it takes is a decent wad of cash. Gosh isn't that what Vodafone has tied up in Verizon Wireless? µ

See also
China Mobile admits to flexing its muscles

L'INQ
GSMA