Vodafone must decide on Verizon venture

Vodafone’s Vittorio Colao needs to decide whether Vodafone stays in its US wireless venture with America’s Verizon, or whether it takes a step back and employs its capital elsewhere.

The decision to establish a new mobile telephony company between Vodafone and what was then Bell Atlantic back in 1999 was a brave and visionary step. Verizon Wireless has proved to be strategically astute (in a defensive sense) and it also has shown itself to be highly profitable, even if it has proved difficult to turn those profits into hard cash. But this mobile marriage between Vodafone and what is now America’s Verizon Communications has also been a management nightmare for Colao and his predecessors at the British company, Sir Chris Gent and Arun Sarin. The ownership split is 55 percent Verizon, 45 percent Vodafone. So whether it’s the choice of technical standards, the distribution of dividends, or pretty much anything else, Verizon calls the shots.