Verizon Communications Inc. (NYSE:VZ) is exploring the possibility of repurchasing US Cellular Corp.’s stake in its Los Angeles business, provided both parties can reach a mutually agreeable price, according to Sowmyanarayan Sampath, CEO of Verizon’s consumer division.
US Cellular currently holds a stake in Verizon’s Los Angeles market segment, a position that Verizon has long sought to reclaim. Sampath expressed Verizon’s interest in repurchasing the stake but emphasized that any deal would need to be financially favorable for Verizon. However, neither Sampath nor Verizon has disclosed the specific price deemed acceptable for the buyback, leaving the potential for negotiation uncertain.
While US Cellular declined to comment on the matter, Telephone and Data Systems Inc., US Cellular’s parent company, previously disclosed its ownership interest of 5.5% in the Los Angeles SMSA Limited Partnership and Subsidiary, with Verizon managing the entity. The investment has contributed significant pretax income for TDS over recent years.
Sampath highlighted the strategic importance of acquiring the Los Angeles stake, noting that it would allow Verizon to streamline operations and eliminate the need for annual payments to a partial owner. He also underscored Verizon’s familiarity with the business, making it an attractive investment opportunity.
Meanwhile, recent reports suggest that Verizon, along with T-Mobile US Inc., may be in discussions to acquire portions of US Cellular, a carrier with over 4 million wireless subscribers across 21 states. As Verizon faces increased competition in the US retail wireless market, Sampath has implemented measures to drive growth, including price adjustments and offering bundled streaming plans.
Despite these efforts, Verizon continues to experience customer losses, with 158,000 retail mobile wireless subscribers departing in the first quarter. This potential buyback presents an opportunity for Verizon to consolidate its operations and potentially strengthen its market position amid evolving industry dynamics.
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