Wednesday, April 3, 2013

Verizon denies any joint Vodafone takeover bid madness

Verizon Wireless today went out of their way to deny any involvement in a speculated joint AT&T/Verizon takeover bid for global wireless operator Vodafone. While the speculated plan had some interesting features to it, I think it is very unlikely to happen, at least in the configuration that was suggested.

While the plan would have solved three major problems in one sweep, it would also have created a major strategic headache for Verizon.

The plan would have nicely dissolved the somewhat frayed relationship between Verizon and Vodafone who share ownership of Verizon Wireless. This is something that Vodafone should have done years ago. Vodafone's relationship with the US market has been tainted by strategic missteps ever since they missed the boat on getting in on the AT&T and Cingular merger.

The joint Verizon and AT&T bid for Vodafone would in a roundabout way accomplish what Vodafone should have done, which was to establish their own presence in the US market, even though AT&T would technically be the company taking over Vodafone. It would also in a big way promote AT&Ts international ambitions.

Even so, I think it would be a giant strategic mistake for Verizon to go along with a plan like this. I'm sure they want Vodafone out of Verizon Wireless but hardly at the strategic price of helping to create one of the largest global wireless carriers (AT&T + Vodafone) as their main competitor in their home market.

If this plan has any chance of happening, I think we should expect AT&T and Vodafone to have to be the ones doing the heavy lifting, not Verizon.

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