Vodafone 'ready to sell stake in French mobile phone company'

The Newbury-based mobile phone giant is understood to be finalising a deal to sell its 44 per cent holding to French media group Vivendi, which owns the rest of the group, for 7bn.

The group is also expected to announce that it has raised a further 800m from the sale of its 24 per cent stake in Polish group Polkomtel.

It is thought that some of the money will be returned to shareholders through a share buyback, with the rest used to pay down debt.

The latest transactions are part of Vodafone's ongoing strategy of streamlining the group through offloading minority holdings it has in telecoms groups around the world.

It has raised more than 7bn during the past six months after selling its holdings in China Telecom and Japan's Softbank.

But despite this, the group is expected to hold on to its 45 per cent stake in Verizon Wireless in the US, which has long been tipped for a sale.

It is thought the stake could fetch about 33bn, but it is understood the disposal would trigger a 10bn capital gains tax bill.

The group was recently hit with a 1.6bn back-tax bill by authorities in India, following its 2007 acquisition of the Indian telecom assets of Hong Kong conglomerate Hutchison Whampoa.

Vodafone, whose joint venture with India's Essar group is one of India's largest mobile operators, disputes that it owes tax on the 11bn US dollar transaction (7bn) because it took place between two foreign companies.

Vodafone said last month that half-year operating profits had increased by three per cent to 6.1bn. It also raised its guidance for full-year profits to between 12.2bn and 11.8bn after higher than expected revenues growth in each of its operating regions.

UK revenues were up 5.2 per cent in the second quarter, leading to growth of 2.9 per cent in the first half, as the increased take-up of smartphones such as Apple's iPhone and mobile internet bundles more than offset "intense" competition.

Vodafone took an 800m impairment for its operations in Greece, which is undergoing austerity reforms after being severely hit by the recession.

On an annualised basis the group's mobile data business has grown to nearly 5bn and fixed line revenue, primarily broadband, has grown to over 3bn. Vodafone's total revenue last year was 44.5bn.

Going forward, the group pledged further investment in its European infrastructure to meet increased data demand as customers watch more video content on mobile phones.

It was not possible to contact anyone from Vodafone to comment.