Also Read: Microsoft to acquire Nokia's handset business for $7.2 bn
Vodafone's Votirio Colao has good reason to smile. The British telecom giant has signed on the dotted line and it will sell its entire 45 percent stake in its US wireless business joint venture, Verizon Wireless, to its US partner.
In the end, all it took for 'operation river', as the negotiations were called, to fructify was for the two CEOs - Vodafone's Vitorio Colao, and Verizon's Lowell McAdam - to spend some time next to each other on exercise cycles in a gym, and continue their conversation over breakfast.
By opting for a buyout instead of a merger, Verizon will get full access to the profits from America's largest mobile operator and with it fresh firepower to invest in its mobile network and fend off challengers in a tough market.
For Vodafone, the accord will allow it to return 71 percent of the net proceeds to shareholders. It will also allow for ramping up investment in its networks to set itself apart from rivals.
Vittorio Colao, CEO, Vodafone, says: "The size of the deal itself allows us to return 71% to shareholders. But, even the remaining 21% is large enough to strengthen the company and to allow us to accelerate our strategy, so the percentage might look small, the percentage retained, but the amount of money is robust enough for allowing Vodafone to have a great future."
There is also the fact that Vodafone will not be paying any tax on this transaction in the UK. Vittorio Colao, CEO, Vodafone, says: "We apply the rules , laws - tax laws which are standard in any of these jurisdictions. We will pay tax in the US because there are tax liabilities generated there. We are not going to have a taxable income in the Netherlands because there is a tax exemption. But if the transaction happened in the UK, there would be no tax liability here as well because there are exactly the same provisions. Important thing is 54 billion pounds will go back to shareholders, those who want to sell will have to pay their own taxes, but it will be a great benefit to all."
The deal will also provide a fillip to Vodafone's capex plans for European countries like Germany, under its 6 billion pound investment plan called Project Spring.
But it's not just the mobile services business that's playing with the big bucks. Software giant Microsoft wants a bigger foot-hold in the mobile telecom space.
So after 2 years of providing Helsinki-based Nokia with its Windows phone software, Microsoft has agreed to buy Nokia's main handset business for over USD 7 billion. This is in keeping with Microsoft's retiring CEO Steve Ballmer's dream to remake Microsoft into a gadget and services company like Apple before he departs.
For Nokia, this is a way out from a losing battle against rivals like Samsung and Apple. The deal will see Nokia's Canadian boss Stephen Elop, who incidentally ran Microsoft's business software division before jumping to Nokia in 2010, returning to Microsoft as the head of its mobile devices business. And while this has the Finnish people dubbing him a Trojan horse, Nokia's chairman Risto Siilasmaa says the decision came after nearly 50 board meetings to explore alternatives to a sale, before deciding that this was in shareholder interest.
Both these deals mark a turning point for the global telecom space. But India, which is a strong market for Vodafone, Microsoft and Nokia, may not see much change on the ground. Vodafone is still in wait-and-watch mode as far as further investments into the country are concerned. And experts say neither Microsoft nor Nokia's ground operations in India will see much of an overhaul.
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