Reuters reports that at the Mobile World Congress Vodafone CEO Vittorio Colao expressed confidence that the company could easily spend on European expansion without needing to sell it's 45% Verizon Wireless Stake. Various analysts have been talking about pressure on Vodafone to increase its wireline presence to compete, which is something it already did some of with the C&W Worldwide deal last year.
Both Verizon and Vodafone have been kept busy quenching rumors of a deal whereby Verizon would take full control of Verizon Wireless, giving Vodafone a huge war chest to put to work elsewhere. Of course, it's taking so much effort because the overall strategic situation is as favorable as it's ever been for such a thing -- whether anyone is actually working on the idea or not at present.
Elsewhere means Europe of course, where many separately feel, hope, or dread a wave of consolidation is building. While its stake in Verizon Wireless is highly profitable, asset prices in Europe are low, competition is fierce with dramatic regional variation, and regulators are even dreaming about more of a pan-European competitive landscape. Some see a Verizon-free Vodafone as very well positioned to ride in and start taking names.
But Colao may have a point. It's not as if Vodafone needs to buy anything so big it would require a sale so large to fund it. Vodafone could simply take the C&W Worldwide acquisition and apply the same plan toward the rest of the continent. They could simultaneously bolster their enterprise presence and gain some truly extensive backhaul-capable infrastructure by buying someone like Colt, or perhaps Interoute or GTS Central Europe, or euNetworks (with whom they are already working), etc. No need to start going around like America Movil and buy stakes in the incumbents and such or even buy them outright, where would that really get them?
A more targeted nextgen fiber approach wouldn't cost them all that much right now, should they be feeling the urge. Selling their Verizon Wireless stake would be overkill unless there is something much bigger at hand.
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