BARCELONA, Feb 25 (Reuters) - Vodafone says that itdoes not need to sell part of its stake in the highly profitableVerizon Wireless joint venture in the United States tobolster its position in Europe.
Speaking to reporters at the Mobile World Congress inBarcelona, Vodafone Chief Executive Vittorio Colao said that theBritish company had a healthy balance sheet and could investwhen it needed to.
Analysts have suggested that Vodafone, the world'ssecond-largest mobile phone operator, could reduce its 45percent stake in Verizon Wireless to fund the purchase of assetssuch as fixed-line companies to counter strong competition inEurope.
"The two things are not totally linked," Colao said. "Ofcourse, having a healthy balance sheet and a very profitable,dividend-generating asset in Verizon helps.
"If it is right to make some investments, we will make someinvestments," he added.
Vodafone has hired Goldman Sachs to advise on apossible 10 billion euro ($13.2 billion) bid for German cableoperator Kabel Deutschland, a source with directknowledge of the matter told Reuters.
It has also been linked with possible deals in Spain.
Sector bankers and some analysts argue that Vodafone needsto acquire fixed assets to fight off challenges from low-costmobile players and telecoms and cable rivals pushing discounted,all-inclusive mobile and fixed bundles.
Buying its own fixed assets, such as local cable operators oralternative telecoms providers, would help the company to keepup with competitors' offers and cut fees paid for fixed access.
Vodafone, unlike its main rivals, is focused mainly onmobile operations in continental Europe. So far it has pursuedonly a modest approach to buying fixed assets country bycountry, otherwise renting access to reach consumers' homes andbusinesses.
However, it may soon be forced into bolder action ifresults start to suffer from what Goldman Sachs analysts havecalled a "structural squeeze on mobile-only operators".
Though Vodafone's Colao emphasised the strength of thecompany's balance sheet and healthy income from Verizon, he saidthat he has an open mind about the possibility of changes in thejoint venture's ownership.
"I have always said the board keeps reviewing the Verizonsituation because it's big," he said. "And we have an openmind."
The Italian executive added that he had seen consumerconfidence fall even further in his home country since Octoberbecause of political uncertainty as it awaits the results ofthis week's national election.