Although wireless has helped telecommunications provider Verizon Communications Inc.'s bottom line this quarter, it remains a bit of a sore spot for the country's second-largest telecom because it doesn't own the business outright. Long time readers of The Deal will remember that Verizon Wireless is actually a joint venture between Verizon Communications and Vodafone. In the early days of The Deal the story of how Verizon Wireless was born regularly filled our pages. For those less familiar, Verizon — then Bell Atlantic — sought to buy Midwestern wireless provider AirTouch, but was thwarted by Vodafone's higher bid. Rather than allowing a new powerful competitor into the marketplace, Verizon put aside its differences, and agreed to merge its wireless business with Vodafone's U.S. prize giving Verizon 55% of the business, and Vodafone the remaining stake. In light of growing competition from an ever expanding AT&T, Verizon had made buying out Vodafone a key strategy to stay relevant following AT&T's announcement it would buy BellSouth. Although Vodafone has made it clear that it doesn't want to sell, the real nail in the coffin for Verizon's buyout plan is the expensive integration costs associated with the MCI purchase that is dragging on its bottom line. Although Verizon's chairman Ivan Seidenberg may have conceded "defeat" Tuesday afternoon, considering Verizon's prior record of tenaciously pursuing its quarry, this is not the last time we'll hear about Verizon eyeing Vodafone. —Matthew Wurtzel
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