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NEW YORK, May 14 (Reuters) - Verizon Communications Inc does not need more cash from its wireless venture withVodafone Group Plc to support its own dividend payments,Verizon Chief Financial Officer Fran Shammo said on Tuesday.
Shammo also said future dividends from Verizon Wirelesswould be leaner than in the past. Verizon controls the venture'sdividend payments and analysts have speculated that it could usethis control to pressure Vodafone into selling its VerizonWireless stake. Verizon owns 55 percent of the wireless venture.
Shammo made the comments at a conference the day afterVerizon Wireless, which is 45 percent owned by Vodafone,declared a $7 billion dividend. In comparison, Verizon Wirelesspaid its parents $18.5 billion in 2012, in two installments.
"If I needed the cash from wireless to pay a dividend I'dtake the cash but I don't see us needing the cash," Shammo said.
Nomura analyst Michael McCormack said he does not thinkVerizon needs more cash to support its dividend this year. Heestimated that Verizon's annual dividend obligation is about$5.7 billion and that it has more than $6 billion in cash tosupport that this year.
Shammo's comments came amid mounting speculation Verizoncould buy Vodafone's stake in the venture if they can agree on aprice. Reuters, on April 24, cited sources as saying thatVerizon was preparing a $100 billion bid for the stake, butinvestors have said they expect Vodafone to seek a higher price.
Shammo declined to comment on the potential for a Verizonpurchase of Vodafone's stake in Verizon Wireless.
Vodafone said on Tuesday that it would announce how itintends to use the dividend cash from Verizon Wireless when itreports its quarterly results on May 21. The UK company returneda large chunk of earlier payouts to shareholders, either via aspecial dividend or a share buyback.
Shammo also cautioned that Verizon Wireless would conservecash to pay down debt and prepare for a spectrum auction, whichcould affect future dividends.
The venture will use cash to pay down $5 billion in debt dueat the end of this year and early next year, Shammo said. It isalso preparing to participate in a U.S. auction of wirelessairwaves that could take place as soon as 2014.
Verizon shares were up 38 cents at $52.93 in afternoontrading on the New York Stock Exchange. Vodafone shares wereunchanged at the close of trading in London on Tuesday.
