There's tension within Verizon Wireless as co-owners Verizon Communications
This week, London's Daily Telegraph reports that the debt rebalancing is nearly complete -- which gives Vodafone a much stronger negotiating position. The heads of the companies have reportedly been talking strategy, recently, but nobody knows exactly what will come of it. Some telecom analysts now see Vodafone forcing Verizon's hand into sharing the wireless wealth through finally having the wireless unit pay out a dividend, but others think an outright all-stock merger between Vodafone and Verizon looks more likely. A third option wherein Verizon buys out Vodafone's share of Verizon Wireless is improbable because Verizon just ain't that rich and the tax hit to Vodafone would be too large.
The American market for wireless communications has never been particularly stable. Remember Cingular Wireless, itself an agglomeration of networks that included AT&T
The path of least resistance speaks for some simple dividend payouts, but Vodafone certainly has the global ambition and wherewithal to pull off a high-stakes merger with Verizon. Vodafone also boasts much higher net profit margins than Verizon -- perhaps a merger would bring about tighter operations and separate landlines from wireless once and for all.
Anything is possible, but the telecom sector is never boring. What should Verizon do with those nosy Brits? The comment box below is dying to hear your opinion.
Fool contributor Anders Bylund he holds no position in any of the companies discussed here. Sprint Nextel is a Motley Fool Inside Value selection. Apple is a Motley Fool Stock Advisor pick. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.