Vodafone offers €7.7 billion for Kabel Deutschland in fixed network push

The operator hopes to take advantage of Kabel Deutschland's high-speed broadband and TV offerings

Vodafone plans to acquire Germany's largest cable operator, Kabel Deutschland, for €7.7 billion (US$10.1 billion) as it looks to become more competitive by combining mobile, fixed broadband and TV subscriptions, it said Monday.

By taking advantage of Kabel Deutschland's high-speed broadband and TV capabilities, the acquisition, if successful, will provide Vodafone with the ability to offer unified communications services and cross-sell to consumers and businesses in Germany, according to Vodafone. It would leave the U.K. operator with 32.4 million mobile subscribers, 5.0 million broadband subscribers and 7.6 million direct TV subscribers in Germany, the company said on Monday.

Vodafone said the acquisition will also allow it to cut costs. It plans to migrate its existing fixed-line DSL users to Kabel Deutschland's cable network where possible, generating savings from closing down DSL central offices, reduced maintenance costs and removing the need to pay unbundled local loop and bitstream fees.

Shrinking revenues from voice and messaging are forcing mobile operators to look for new revenue streams. For Vodafone, fixed networks have become a large part its efforts to grow in the challenging European market. The company's results for the year to March 31 showed that fixed line revenue had grown to £4.7 billion ($7.1 billion) from about £3.6 billion a year earlier.

The acquisition bid didn't surprise analysts. Local reports have speculated that Vodafone would strengthen its fixed-line position by either bidding for Kabel Deutschland or striking a closer wholesale agreement with Deutsche Telekom, CCS Insight wrote in a recent research note. Given that Vodafone already has a significant fixed-line position in Germany, having taken full-ownership of Arcor in 2008, either move would reflect the severity of the threat from cable providers offering faster and lower-cost services, CCS Insight said at the time.

As part of Monday's announcement, Kabel Deutschland has provided Vodafone with a matching right in the event of a competing offer and agreed to cooperate with Vodafone in relation to securing merger control approvals, Vodafone said.

Send news tips and comments to mikael_ricknas@idg.com

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuestelecommunicationCarriersVodafone GroupKabel DeutschlandMergers and acquisitionsbroadband

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Mikael Ricknäs

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?