Vodafone finally cashes in on Verizon Wireless
"Joint ventures and strategic partnerships have a productive lifecycle and this one had run its course," says Mike Sapien, Principal Analyst, Enterprise Telecoms at Ovum.
After years of having this strategic venture together, Verizon has purchased the 45 percent of Verizon Wireless that Vodafone owned.
Speculation about this purchase has been rumoured for many years but during the past six months, negotiations were reportedly getting more serious. Now it has finally been announced.
"Ovum observed for years that the partnership was strained and the two parties were more likely to compete than team for many large business opportunities (e.g. M2M) and many large enterprise MNC accounts."
Sapien says Verizon has been trying to integrate its wireless business into Verizon Enterprise Services (enterprise division) and now it will be free to complete this integration without any concern about the Vodafone ownership or maintaining its separate wireless unit
"This integration appears to have been slow in coming and delayed in comparison to other large carriers who had similar wireline and wireless business units," he says.
"Mobility and mobile access have quickly become a standard requirement for just about any enterprise service or application.
"With many synergistic technologies emerging (e.g. LTE, SDN, cloud), this integration will become even more critical to Verizon over the coming years."
As a result, Sapien believes Vodafone now will have many options as the capital can fund its quest to expand, integrate its Cable & Wireless business and acquire more operator assets (e.g. cable operations) in its common markets.
"Vodafone can also take advantage of the aforementioned integration of wireline and wireless operations to its advantage," he says.
"Vodafone will be free to expand its global mobile operations and services without having to address Verizon Wireless ownership, service overlap or competition.
"Ovum is not ready to speculate on any interest in Vodafone by others but this move allows Vodafone to more confidently control its own future.”