Vodafone and Swisscom Mobile have signed a revised long-term Partner Network Agreement in Switzerland with an initial five year term. This will enable Swisscom Mobile and Vodafone customers to continue to benefit from Vodafone’s global products and services such as Vodafone live!, Blackberry from Vodafone and international roaming services, including preferred roaming arrangements. In addition, Vodafone and Swisscom will continue to co-operate in serving international corporate customers.
Commenting on the transaction, Arun Sarin, Chief Executive of Vodafone, said:
“Vodafone and Swisscom have enjoyed an excellent relationship since we acquired our 25% stake in Swisscom Mobile in January 2001. We do not, however, see ourselves as the most appropriate holder of this minority stake in the longer-term and Swisscom is keen to increase its holding in Swisscom Mobile to drive through synergies in its fixed and mobile businesses. It therefore makes sense to sell our stake now for an attractive price.”
The sale is expected to close on 20 December 2006. The sale proceeds will be used to reduce Vodafone’s net indebtedness.
This transaction does not materially affect Vodafone’s proportionate mobile revenue and EBITDA margin outlook for the financial year ending 31 March 2007. However, Vodafone will no longer receive anticipated dividends from Swisscom Mobile of approximately 0.1 billion this year and there will be a corresponding effect on the Group’s free cash flow outlook for the financial year ending 31 March 2007.
As a result of the transaction, Vodafone currently anticipates recording a gain on disposal of approximately 0.1 billion in its results for the year ending 31 March 2007 and will cease recording its share of the result of Swisscom Mobile from today’s date.
