Vodafone to get Verizon dividend

29 July 2011 Last updated at 00:28 GMT This is the first dividend Vodafone shareholders will have received from Verizon. Vodafone shareholders will finally receive a return on the company's investment in Verizon Wireless after the US telecoms firm approved the payment of a $10bn (£6.1bn) dividend.

Vodafone owns a 45% stake in Verizon, and so will receive $4.5bn, due to be paid on 12 January next year.

Shareholders will then get a special dividend of £2bn, equivalent to 4 pence a share, in February, the company said.

The balance of the dividend will be used to reduce debt levels.

This is the first dividend Vodafone shareholders will have received from Verizon.

"Our long term partnership in Verizon's strong and successful wireless business has seen the value of our investment increase significantly over recent years," said Vittorio Colao, Vodafone's chief executive.

"The dividend from Verizon Wireless allows us not only to reward our own shareholders with an immediate and sizeable cash return, but also to continue to reinvest in our business.

Last week, Vodafone reported a small rise in quarterly service revenues, as weak trading in southern Europe was offset by strong growth in India and Turkey.

The company also confirmed its outlook for the full year, which had previously been stated as an adjusted operating profit of between £11bn and £11.8bn.

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Verizon Wireless to pay $10 billion to parents

NEW YORK | Thu Jul 28, 2011 7:01pm EDT

NEW YORK (Reuters) - Verizon Wireless plans to pay a $10 billion dividend early next year to its parents, Vodafone Group Plc (VOD.L) and Verizon Communications (VZ.N).

Vodafone will receive $4.5 billion, or $1 billion less than the amount the British company's chief financial officer, Andy Halford, had said he expected as recently as June 30.

Verizon Wireless, the largest U.S. wireless service, said it would make the payout based on the stake held by each parent company. Vodafone owns 45 percent of Verizon Wireless, and Verizon Communications owns the rest.

Vodafone has not received a payout from Verizon Wireless since 2005, in large part because Verizon has focused on paying down debt.

Verizon, which controls the wireless unit, had recently signaled that it would be ready to pay a dividend in 2012.

There has also long been speculation that Verizon would try to buy out Vodafone's stake in the venture, although no deal has come to pass.

(Editing by Steve Orlofsky)

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