Vodafone forecasts Verizon dividends

Vodafone signalled yesterday the UK mobile phone group expects to start receiving dividends again from Verizon Wireless next year.Verizon Wireless, the second-largest US mobile operator, emerged last week as the highest bidder in a radio spectrum auction. That development prompted fresh questions about when the company would resume dividend payments.

Vodafone has a 45 per cent stake in Verizon Wireless, the remainder held by Verizon Communications, the US telecommunications group.Last Thursday regulators announced Verizon Wireless had agreed to pay $9.4bn for spectrum that should enhance its mobile broadband services. That sum exceeded some analysts' expectations, and could increase Verizon Wireless' debt to $17bn-$20bn.

Verizon Wireless last issued dividends in 2005, when Vodafone received £923m. The payments dried up after Verizon Communications decided to use Verizon Wireless' cashflow to pay down the mobile operator's debt.Verizon Communications has management control of Verizon Wireless. It declined yesterday to give a timetable for the resumption of dividend payments: "Cash distribution policy for 2009 and beyond will be made by the Verizon Wireless board, which will assess a whole range of factors in making its decisions on timing."

Vodafone signalled it was sticking by its assertion last year that the world's largest mobile group by revenue should get dividends sometime next year.

Source : http://www.ft.com/

Downwardly mobile prices : 3 mobile network

THE first shot in the battle to revolutionise the cost of making international calls was fired last week. But the company behind it may not have realised the ramifications of doing so. Mobile phone group 3 launched a handset which allows users to make free international calls, thanks to its tie-up with VOIP (Voice Over the Internet Protocol) company Skype. This should inject some desperately needed competition, and with luck will trigger innovations which will slash the cost of international calls.

3 mobile phones have been playing up the benefits for groups of friends in the UK to talk for free if they all sign up for the new handset (£49.99 and then a minimum of £12 per month pay as you go), although many networks already offer friends free calls. But by adding Skype technology to handsets which went on sale on Friday, 3 has opened up the possibility of virtually unlimited free calls between millions of people globally.

Many home phone companies, including British Telecom and Talk Talk, offer free or discounted calls to certain overseas countries. Where the new 3 deal has the edge, though, is in allowing free calls overseas while users are out and about.

The potential savings for mobile users while overseas are considerable. Even allowing for the price cap imposed by the European Parliament on so-called roaming charges at the end of the summer, which has reduced costs by 60%, using a mobile overseas is expensive. Calling home from France costs 38p a minute with Vodafone and Orange, and 35p a minute with O2, while calling the UK from the US costs £1.30 a minute with Orange, £1.25 with Vodafone and 99p with O2.

Source : http://business.scotsman.com