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Verizon Communications Gains Full Ownership of Verizon Wireless With $130 Billion Vodafone Deal

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alent1234

macrumors 603
Jun 19, 2009
5,688
170
Shaun said:
Seems like most of the UK mobile carriers are getting into fixed line broadband now. I don't see the logic myself. More and more people are ditching their fixed line connections because they don't want to pay the extortionate line rental charges when they probably use their mobile 95% of the time anyway. Surely the future is mobile broadband extended into the home. No wires, no phone line needed, no hassle. They should be spending that money on significantly increasing their bandwidth capacity to allow more and more data services.
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i'll take unlimited fixed broadband at $50 a month and a small amount of mobile broadband at a cheap price any day over mostly mobile broadband.

i'll use maybe 1.5GB on both my smartphones in a month compared to 200GB on my home internet connection. the nature of wireless tech means it will always be slower and more expensive than home wired internet access
 
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alexforget82

macrumors regular
Jun 27, 2013
135
17
Montreal, Qc
"Verizon Communications Inc. has no interest in expanding to Canada, says the company's CEO Lowell McAdam, ending months of speculation that the U.S. telecom giant was poised to shake up Canada's wireless market."

http://m.theglobeandmail.com/report-on-business/verizon-ceo-now-has-no-interest-in-canadian-entry-report/article14071479/?service=mobile
 
Plutonius

Plutonius

macrumors G3
Feb 22, 2003
9,033
8,404
New Hampshire, USA
Shaun said:
Seems like most of the UK mobile carriers are getting into fixed line broadband now. I don't see the logic myself. More and more people are ditching their fixed line connections because they don't want to pay the extortionate line rental charges when they probably use their mobile 95% of the time anyway. Surely the future is mobile broadband extended into the home. No wires, no phone line needed, no hassle. They should be spending that money on significantly increasing their bandwidth capacity to allow more and more data services.
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They are going to get their money one way or another. If people switch from fixed line to mobile broadband, expect the price of mobile broadband to go up.
 
E

everything-i

macrumors 6502a
Jun 20, 2012
827
2
London, UK
Shaun said:
Seems like most of the UK mobile carriers are getting into fixed line broadband now. I don't see the logic myself. More and more people are ditching their fixed line connections because they don't want to pay the extortionate line rental charges when they probably use their mobile 95% of the time anyway. Surely the future is mobile broadband extended into the home. No wires, no phone line needed, no hassle. They should be spending that money on significantly increasing their bandwidth capacity to allow more and more data services.
Click to expand...

There is no where near the available spectrum to provide the bandwidth required to replace fixed line broadband en mass. It would be nice for everything to go wireless but its just not possible.
 
Rocketman

Rocketman

macrumors 603
Dec 2, 2001
6,191
1,186
Claremont, The intellectual capitol of the world.
That is not the whole story. Vodafone is issuing a dividend to return 71% of the proceeds to shareholders. They are only using about $5B to expand LTE service inside UK.

Verizon is issuing $61B in bonds at 5% interest to raise the cash to do the deal now and capture the revenue stream to clear the debt. Just the fee to place the bonds is $1.2B and this is split among 5 banks and one single guy (Paul J. Taubman). The one guy is getting an 8 figure payday! ($20-80m). My guess is the government will capture fully half of that!

Verizon said:
Financing and Approvals

The transaction consideration of $130 billion consists of a combination of cash, Verizon common stock and other items.

Verizon will pay Vodafone $58.9 billion in cash. To fund this portion of the consideration, Verizon has entered into a fully executed $61.0 billion Bridge Credit Agreement with J.P. Morgan Chase Bank, N.A., Morgan Stanley Senior Funding, Inc., Bank of America, N.A. and Barclays. Verizon intends to reduce the commitments under the Bridge Credit Agreement with the issuance of permanent financing. In addition, Verizon expects to maintain capital structure, balance sheet and financial policies consistent with investment-grade credit metrics, in part based on 100 percent access to Verizon Wireless’ cash flow.

Verizon will also issue common stock currently valued at approximately $60.2 billion to be distributed to Vodafone shareholders, subject to a collar arrangement with a floor price of $47.00 and a cap price of $51.00 that will determine the maximum and minimum number of shares to be issued upon closing of the transaction. In addition, Verizon will issue $5.0 billion in notes payable to Vodafone, and Verizon will sell its 23.1 percent minority stake in Vodafone Omnitel N.V. to Vodafone for $3.5 billion. The remaining $2.5 billion of the transaction value will be a combination of other consideration.
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Reuters said:
The 364-day billion bridge loan will be refinanced with a permanent capital structure consisting of $49 billion of corporate bonds and $14 billion of loans, sources told Thomson Reuters. The loans will include a $2 billion revolving credit and $12 billion of term loans.
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$130B, to compare scale, is almost as much cash as Apple has, the largest cash hoard (retained earnings) in the entire world.

One might remember Apple issued bonds to finance its domestic expansion plans since it cannot repatriate cash from outside the USA without a substantial double tax penalty.

Rocketman
 
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the8thark

the8thark

macrumors 601
Apr 18, 2011
4,628
1,735
fullauto said:
AND Australia. God knows Vodafone needs all the help they can get down under. I still experience frequent dropouts.
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I understand your feeling. Very few internationals care for Australia. But when the **** hits the fan they surely want the Australian experts to fix up the mess.
 
A

asthamapheo

macrumors 6502
Jun 26, 2013
285
0
$130 billion?:eek: that's huge! by my calculattions, it means that VZ has a value of $288-290 billion. mind-blown!
 
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fatboyslick

macrumors regular
Jun 23, 2010
234
76
Shaun said:
Seems like most of the UK mobile carriers are getting into fixed line broadband now. I don't see the logic myself. More and more people are ditching their fixed line connections because they don't want to pay the extortionate line rental charges when they probably use their mobile 95% of the time anyway. Surely the future is mobile broadband extended into the home. No wires, no phone line needed, no hassle. They should be spending that money on significantly increasing their bandwidth capacity to allow more and more data services.
Click to expand...


What powers the mobile networks?

Ground-laid fibre cables

That's why networks are buying up fixed line companies, so they can cost save at one end and then at the other offer customers bundled services.

Most companies still demand a fixed network for broadband and call centres so it makes sense to offer a bundled package that undercuts BT who by far dominate the fixed market.

Vodafone bought Cable and Wireless for this very reason, who have the world's largest fixed network.
 
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