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This pair could hardly get any closer together without sharing a room.
But Vodafone still doesn't think that its relationship with Verizon is tight enough. The way things are going, I wouldn't be surprised to see a trans-Atlantic merger before long.
Vodafone reported a very competent fourth quarter earlier this week, with 7.5% lower earnings year over year on 4% higher sales. The ever-changing Vodafone beast shifted again by selling substantial stakes in China Mobile (NYSE: CHL ) , SoftBank, and Vivendi collaboration Societe Francaise du Radiotelephone.
The Vivendi situation wasn't very different from the Verizon Wireless partnership, except for its smaller scale and the fact that Vivendi wanted to take control of the whole business for a long time. Verizon seems far less interested in owning its wireless unit outright, which makes sense because it's such a huge business.
After growing on its own with the super-successful "Can you hear me now?" marketing campaign and tacking on smallish acquisitions like Alltel and SureWest Wireless, Big Red has become the only real rival to AT&T (NYSE: T ) in the American market for mobile services. Buying out Vodafone's interests with these sky-high stakes would be prohibitively expensive. Merging with its partner would be a far more doable alternative, and I think Vodafone would welcome a deal like that.
And now Verizon is getting even more entangled with Vodafone. In that fourth-quarter report, the British giant disclosed that it is "putting together unified account teams to handle large multinational enterprise accounts, gaining efficiencies through procurement and aligning our technical roadmaps" with Verizon.
Gaining efficiencies and aligning technical roadmaps sounds an awful lot like getting ready to pitch a merger to regulators on both sides of the pond. Verizon COO Lowell McAdam recently said that the proposed merger between AT&T and T-Mobile is "inevitable."
Maybe he misspoke. A combination of his own company and Vodafone makes at least as much sense as the dreaded AT&T-Mobile hydra. Just buy the rings and plan the engagement party already, so that these global telecom giants can go back to simply paying out gigantic dividends like they're supposed to.