NEW YORK—Vodafone Group plc plans to keep its 45-percent stake in Verizon Wireless for the foreseeable future, Verizon Communications Inc. chief executive officer Ivan Seidenberg told analysts in a conference call Tuesday.
Seidenberg said he met last week with Arun Sarin, Vodafone’s CEO, to discuss their companies’ joint ownership of Verizon Wireless.
“What Arun communicated to us was that Vodafone was extremely pleased with their position in the partnership,” Seidenberg said. “The operating agreement between the two of us is strong, it’s sustainable, it’s stood the test of time over the last five or six years and their view is that the creation of value that’s available to them over the next several years is far greater than any strategy that they might have to exit the partnership.”
Seidenberg went on to say that Sarin told him that John Bond, Vodafone’s new chairman, felt the same way about the partnership with Verizon Communications. Seidenberg added that he and Sarin had agreed that both men would “make sure that we clarify to our respective investors that at this point in time there really isn’t much reason for people to speculate over any change in the whole arrangement between the two companies.”
“As far as I’m concerned, I think the issue here is pretty much resolved over the next several years, unless there’s a specific change on the part of Vodafone’s thinking,” Seidenberg said. “I think we now have clarity over the issue of the partnership.”
The second quarter was another strong one for Verizon Wireless, as the company bumped up its average revenue per user, continued its long streak of impressive customer growth and pushed its churn levels to another all-time low.
Last week, the nation’s No. 2 carrier reported that it added 1.8 million net new customers, all of them through direct channels, in the second quarter.
Verizon Wireless’ total churn for the second quarter was 1.13 percent and its retail postpaid churn was just .87 percent, the company reported. In terms of ARPU, Verizon Wireless improved its numbers to $49.71, up nearly 30 cents from the previous year’s second quarter and an increase of more than $1 from the first quarter of 2006. Data revenue made up almost 13 percent of ARPU.
Verizon Wireless’ total revenues were up 18 percent to $9.2 billion for the quarter.
“We saw better-than-expected sequential growth,” said Doreen Toben, Verizon Communications’ chief financial officer, during the conference call. “Wireless continued to surpass its own milestones.”
