Update: Citigroup analyst Michael Rollins this morning asserted in a research note that the most likely outcome of any discussions between Vodafone (VOD) and Verizon (VZ) over the future of Verizon Wireless is that VZ starts paying out dividends to VOD by late 2012.
As I posted earlier, a story over the weekend in The Telegraph said that the two sides have been holding talks on “finding a solution” for Verizon Wireless.
“We see the status quo with dividend distribution by late-2012 to be, by far, the most likely outcome for now…[and] assign virtually nil probability to other options such as a stake sale,” he writes. The Telegraph piece theorized that one possibility was that one of the joint venture partners in the wireless carriers could sell their stake to the other.
Rollins says that a merger scenario of the two companies becomes more plausible over time as LTE becomes the dominant technology aand content and apps becomes more central to the mobile business. But he adds that “synergy is unlikely to be particularly significant for two scale players and the size and complexity of the combination could be a deterrent.” Another potential issues: “U.S. political sensitivities.” (I.e., Washington might not be too keen on having Verizon controlled� by a company based in Europe.)
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