Vodafone splashes billions on European expansion

Vodafone splashes billions on European expansion

Telekom has 40 percent of consumer broadband connections in Germany, while Vodafone and Liberty's local unit Unitymedia would have a combined market share of 30 percent, figures from the VATM industry association show.

"This transaction will create the first truly converged pan-European champion of competition", Vodafone's chief executive Vittorio Colao commented in the statement, adding that the company would "become Europe's leading next generation network owner, serving the largest number of mobile customers and households across the EU".

"It is also a transformative combination for Vodafone, we will become the leading next-generation network owner in Europe, serving the largest number of mobile customers and households across the European Union". "Vodafone will become Europe's leading next generation network owner, serving the largest number of mobile customers and households across the European Union".

Liberty will remain in Britain, Ireland, Switzerland, Belgium, Poland and Slovakia. Deutsche Telekom also wants to win approval for its purchase of Liberty Global's Austrian landline division, and the acquisition of Tele2 AB's business in the Netherlands.

The deal targets the United States giant's operations in Romania, Germany, Czech Republic and Hungary.

Tim Hoettges, Deutsche Telekom's CEO, in February called for such a deal to be blocked, saying the convergence of TV and cable services at such a scale could be harmful for democracy in the country. "This is one of those moments".

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Hoettges has today reiterated this belief, but Colao dismissed his counterpart's concerns as self-serving, adding that he did not expect any potential resistance from European Union regulators because Vodafone and Unitymedia's cable assets did not overlap. He also proposed a boost of investment and innovation in Germany where Deutsche Telekom controls competitive market sequel to Liberty Global's acquisition. "There is limited overlap and, therefore, no negative impact on competition resulting from the transaction", Vodafone noted.

In the UK, Vodafone uses a combination of the Cable and Wireless network it acquired in 2012 and a wholesale agreement with Openreach to deliver its broadband services. Customers (including housing associations) will continue to have a range of alternatives. The transaction will not include UPC Romania's satellite TV business, Focus Sat, however.

The cable market has been revitalized by platform consolidation that has seen the rise of more competition from Tele Columbus' PYUR, as well as rapid next-generation TV and broadband rollouts by Vodafone and Liberty.

A break fee of 250 million euros will be payable to the British company, in certain circumstances, if the deal does not complete.

Vodafone anticipates that completion will take place around the middle of calendar 2019.

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