Vodafone Group Plc plans to retain a £2.1 -illion dividend from US venture Verizon Wireless rather than returning it to shareholders as it reported the first full-year revenue decline since 2005.
Verizon plans to use the cash, the third dividend since the partnership with Verizon Communications Inc restarted payments in 2012 for wireless spectrum and funding its business.
Revenue for the 12 months through March was down 4.2 per cent to £44.4 billion,.
Verizon Communications, which said it was interested in buying Vodafone's 45-per cent stake in the venture, had increased pressure on its partner, and told analysts recently that $100 billion was a fair price for Vodafone's holding. Chief financial officer Andy Halford said at a press conference in London today, that Vodafone was a ''happy holder of Verizon Wireless.
Service sales declined 4.2 per cent in the three months ended March 2013, the third straight quarterly decline with customers in Europe cutting their mobile plans.
Vodafone added it was very comfortable with its successful US joint venture Verizon Wireless, but in case an offer materialised that would benefit it greater than the present arrangement, it would be considered.
Vodafone's partner Verizon Communications had though not made any secret of its desire to buy out Vodafone in a multi-billion dollar deal that would be one of the largest of all time.
Vodafone chief executive Vittorio Colao told journalists at a briefing that if an offer that was more advantageous than the current joint venture, were to come the company would consider it.
Colao was speaking after the company posted its biggest ever fall in key quarterly organic service revenue.
Vodafone said yesterday that annual net profits fell 90 per cent after the company took a massive impairment charge relating to its businesses in debt-laden eurozone nations Italy and Spain.
Earnings after taxation plummeted to £673 million in the group's financial year to the end of March, as against £7.0 billion in 2011-2012, the company said in a results statement.
Group revenues were down 4.2 per cent to £44.44 billion.
The company's business in Italy and Spain had been hit hard by the impact of the ongoing eurozone sovereign debt crisis.
According to the company, it took a second-half hit of £1.8 billion, which took its total impairment charge to £7.7 billion for Italy and Spain.
"We have faced headwinds from a combination of continued tough economic conditions, particularly in Southern Europe, and an adverse European regulatory environment," said Vodafone chief executive Vittorio Colao in the statement.
He added, "The board remains focused on balancing ongoing shareholder remuneration with the long-term investment needs of the business, and going forward aims at least to maintain the ordinary dividend per share at current levels."