David Prosser: Call waiting... Colao has yet to make the big decisions at Vodafone

The more dramatic strategic option for Vodafone now would be to pursue a fully fledged merger with Verizon Communications

It's a marathon not a sprint. That might be the best way to characterise where Vittorio Colao, chief executive of Vodafone, now stands with his plans to refocus the telecoms giant. The sale of Vodafone's minority stake in France's SFR amounts to a confident passing of the 13-mile mark. But the slog to the finishing line will be a lengthy one and there is still "the wall" to get past.

We should be gracious. Mr Colao's efforts to clean up Vodafone's messy portfolio of interests continues to proceed well. The French sale – lauded yesterday as having been agreed on terms very much in Vodafone's favour – follows similar disposals in Japan and China. Vodafone's difficulties in India are also being resolved and a deal looks imminent for its exit from the Polish market.

That, however, will still leave Vodafone with one huge minority stake in an overseas venture – its 45 per cent interest in Verizon Wireless, the mobile subsidiary of America's Verizon Communications. This stake has long been a pain in the neck for Vodafone, which has seen Verizon Communications refuse to sanction a dividend payment by its subsidiary since 2005.

Officially, the reason for that is Verizon's wish to see the company pay off its debt before paying out dividends. But plenty of companies with gearing still pay shareholders a handsome income: the unofficial reason for denying Vodafone a return is that Verizon Communications wants to press the British company into selling its interest. And the trouble with that ambition is that even were Mr Colao happy to do so, a deal would land Vodafone with a capital gains tax bill – $10bn (£6.2bn) or more, analysts estimate.

How, then, might the impasse be resolved? Well, the good news is that Verizon Wireless will be debt-free by the end of the year. That, combined with a decent personal relationship between Mr Colao and Verizon Communications' management (better than Mr Colao's predecessors' relationships, that is), is expected to see Verizon Wireless at last resume dividend payments in 2012. The decision is due in November.

Then will come the really big choices. Will Mr Colao finally decide that having secured some additional value for shareholders, he can sell this stake with no loss of face, perhaps mitigating the tax problem via some sort of deal in Italy, where Verizon has a stake in Vodafone's business? That would be a continuation of the policy that has seen the company sell SFR and the rest.

The more dramatic option would be to transform the collaboration on Verizon Wireless into a fully fledged merger between the two parent companies. Don't rule that out.



Lessons from Chinafor Glencore

What does the Chinese-financed Minmetals Resources bid for Australia's Equinox Minerals tell us? Well, first, it demonstrates that China's appetite for securing natural resources is ongoing – and that the country is prepared to pay through the nose, with Minmetals paying a third more than Equinox's market value as at the end of last week. Second, it offers interesting insights into why Glencore, the Swiss commodities trader, might finally be preparing to put its secretive nature to one side in favour of a $60bn IPO.

One way of looking at this is to say that in going for a listing, Glencore is conceding the additional financial firepower that a float would provide has now become more important to it than its desire to remain a private company with fewer responsibilities to divulge what it is up to. The Equinox deal is an example of why this rationale has come to the fore: without additional firepower, even Glencore, until now more than capable of holding its own in the competition for assets, will struggle to compete with the Chinese.

There is an alternative read-across from the Equinox deal to Glencore, however. One might say the Chinese are over-paying for the company. The premium makes sense only if you think the copper price will continue to soar in the years ahead – if you buy the idea of the commodity super-cycle, in other words. But not everyone does. They point out copper is almost 10 per cent off the highs – well above $10,000 a metric tonne – seen only a couple of months ago.

What if Glencore quietly shares that view? It might just havedecided that it needs to get its flotation away now in order to cash in at the top of the commodities market.



Don't buy the end of tax year rush

Today is the day the savings industry loves more than any other. The end of the tax year at midnight gives every financial servicescompany in the land the opportunity to sell customers products predicated on tax reliefs that will be lost for good if they are not taken up now. From individual savings accounts down, the message is simple: end of season sale, everything must go.

It's a daft system. For one thing, for all the billions poured into tax reliefs, there is little evidence that savers are putting money by for the long-term that they would otherwise have frittered away. Tax breaks may encourage people to save via one vehicle rather than another, but do not necessarily increase the total saving stock.

For another, tax breaks are all about the short term. They encourage people to make decisions for entirely the wrong reason – to get a discount of a few quid on this year's tax bill rather than because of sensible long-term financial planning.

Finally, this is also a system that leaves people with gaps in their families' finances. It encourages people to think about individual products, rather than looking at all their financial needs in the round.

Expensive, inefficient and dangerous? That sounds like a ripe opportunity for austerity savings to me. But don't bet on the Chancellor risking any further wrath from the squeezed middle.

News
scienceExcitement from alien hunters at 'evidence' of extraterrestrial life
Life and Style
Customers can get their caffeine fix on the move
food + drink
Sport
sport
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
PROMOTED VIDEO
Life and Style
techCould new invention save millions in healthcare bills?
News
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Voices
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
News
Jermain Defoe got loads of custard
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Business Analyst - Banking - London - £550 - £650

£550 - £650 per day: Orgtel: Business Analyst - Traded Credit Risk - Investmen...

Data Centre Engineer - Linux, Redhat, Solaris, SAN, Puppet

£55000 per annum: Harrington Starr: A financial software vendor at the forefro...

.NET Developer

£600 per day: Harrington Starr: .NET Developer C#, WPF,BLL, MSMQ, SQL, GIT, SQ...

Data Centre Engineer - Linux / Redhat / Solaris / Puppet / SAN

£65000 per annum: Harrington Starr: A financial software vendor at the forefro...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape