BARCELONA (Reuters) - Vodafone Group Plc (VOD.L) chief Vittorio Colao said he could not rule out an exit from the United States, a day after posting results showing the Verizon Wireless business there has become the main growth engine for the British group.
Speaking in Barcelona at a conference organized by investment bank Morgan Stanley, Colao said the Vodafone board regularly reviews what to do with its stake in Verizon Wireless and would continue to do so.
Vodafone owns 45 percent of Verizon Wireless and Verizon Communications Inc (VZ.N) owns the rest, and shareholders from both sides have questioned whether Vodafone will want to remain in an asset that it does not control.
The two parents have for instance clashed in the past over the payment of a dividend.
“Verizon Wireless is in the biggest, most attractive market in the world, and it’s the leading company in terms of management and it is still going very well,” Colao told the technology, media and telecoms conference.
“Having said that ... the board formally twice a year, and perhaps even more, looks at the portfolio. We look at the pros and cons and we look at the situation and the board makes that decision.”
The question of what to do with Verizon was reignited in recent years after Vodafone embarked on a program to sell assets it did not control, aiming to streamline its portfolio and return cash to shareholders who felt the company’s share price did not reflect the sum of its many individual assets.
Half-year results released on Tuesday however showed the Verizon business contributes over half the group’s adjusted operating profit and is a key driver of growth at a time when consumers in Europe are cutting back on using their mobile phones.
Colao was asked how Verizon Wireless differed to the French SFR business, in which Vodafone sold its 44 percent stake to majority partner Vivendi (VIV.PA) for 6.8 billion pounds in 2011.
“First there is the geographic exposure and the quality of the asset,” he said, noting the U.S. is in a healthier state than the French market, which has been hit by a price war.
“It is a judgment that you have to make, I see myself as the guardian of money from shareholders,” he said.
With many customers cutting back on spending or using applications such as Skype for free, Vodafone is rolling out a new offer called Vodafone Red, which allows customers to make unlimited calls and text messages and pay for different amounts of data to access the Internet.
It hopes this will also enable the group to charge more for the fastest speeds provided by its fourth-generation network, which it is rolling out around the world.
Asked if this could result in customers initially paying less as they save on the cost of voice and texts, Colao said it could, but over time he expected it to pay off.
Editing by David Holmes