The long-expected restructuration of Liberty Global’s cable assets in Europe through a deal with Vodafone is now getting into motion.
“Vodafone confirms that it is in early stage discussions with Liberty Global regarding the potential acquisition of certain overlapping continental European assets owned by Liberty Global,” the UK-based mobile network operator said in a statement. “There is no certainty that any transaction will be agreed, nor as to the terms, timing or form of any transaction.”
Vodafone stressed that “is not in discussion with Liberty Global regarding a combination of both companies”.
The talks don’t come as a surprise as the sale of Liberty Global’s Austrian cable operator UPC to Deutsche Telekom’s subsidiary T-Mobile Austria in December 2017 was considered to be the first part of a new approach between Vodafone and Liberty Global.
Industry insiders point to Germany as one of the main markets in which consolidation would make sense, thus one of the core assets Vodafone is thought to be interested in is Liberty Global’s German cable subsidiary Unitymedia.
By combining the former Kabel Deutschland cable network Vodafone acquired in 2013 with Unitymedia, Vodafone could create a powerful converged fixed-line and mobile operator offering its services nationwide, competing head-on with incumbent telco Deutsche Telekom. Currently, Vodafone’s German cable network covers 13 federal states with Unitymedia serving the remaining three states.
A merger between Germany’s two largest cable operators has long been ruled out due to local regulatory concerns. An industry insider, however, told Broadband TV News that the European Commission in Brussels which would probably be the authority ruling on the transaction because of the size and geographical footprint of the companies involved has a more relaxed view and could consider consolidation in the cable market as a development increasing competition with telcos.
Vodafone and Liberty Global also have overlapping operations in further continental European countries including the Czech Republic, Hungary and Romania.