Bell Comments On Verizon-Vodafone Speculation - Quick Facts

(RTTNews) - BCE Inc.'s (BCE, BCE.TO) Bell noted the widespread media speculation about US Telecommunications giant Verizon Communications Inc.'s (VZ) plan to buy out international partner Vodafone Group Plc.'s (VOD, VOD.L) 45% stake in its wireless business. Bell said that the rumour confirmed what the majority of Canadians have been telling the federal government: a company like Verizon with the scale to consider an acquisition of approximately US$130 billion dollars does not need any handouts from Ottawa to compete in the Canadian wireless market.

In a recent national survey by Nanos Research, Canadians said clearly that they want a level playing field in wireless: 81% said the government should give no favours to any carrier, foreign or domestic, while just 2% supported the idea of special favours for giant US entrants like Verizon.

Earlier today, British telecom giant Vodafone Group confirmed that it is in talks with Verizon Communications regarding a possible disposal of Vodafone's 45 percent stake in their joint venture Verizon Wireless. There is no certainty that an agreement will be reached, Vodafone said.

Verizon Wireless, the largest U.S. cellphone carrier, is the US wireless joint venture between Verizon Communications and Vodafone, with Verizon owning a 55 percent stake and Vodafone owning a 45 percent interest. The joint venture began operations as Verizon Wireless on April 4, 2000.

On Wednesday, the Wall Street Journal reported that Verizon has renewed talks to buyout Vodafone's stake in their joint venture. The purchase of the stake could reportedly cost Verizon well over $100 billion.

Verizon has been contemplating the buyout of the stake several times in the past decade, but pricing has been the biggest stumbling block along with the risk of raking up a huge tax bill nearing $10 billion.

As per reports, talks failed earlier this year when Verizon was looking to pay about $100 billion for the stake, while Vodafone was expecting in excess of $130 billion. Since July, the discussions have accelerated due to the rising interest rates and growing competition in the U.S. wireless market, the report said.