Vodafone, which is Germany’s second-largest mobile network behind Deutsche Telekom, entered the fixed-line market through a 2013 takeover of Kabel Deutschland, then Germany’s largest cable network, for $10 billion.
Germany was Vodafone’s largest market by revenue in the quarter ended Dec. 31, 2017, delivering nearly a third of the group total in Europe for the period.
Liberty Global’s German operations, meanwhile, are its second-largest in Europe after the UK and Ireland, with 12.98 million homes passed in the market as of December 2017.
In the 2017 fourth quarter, Vodafone’s Vodafone Kabel Deutschland GmbH and Liberty’s Unitymedia represented 81% of cable TV households, according to data from Kagan, a media research division of S&P Global Market Intelligence.
The cable market has been revitalised 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.
That said, cable’s market share has been in decline and now stands at 44% of total TV households in Germany, Europe’s largest market, meaning the deal between Vodafone and Liberty may not pose the same monopolistic concerns as previously, according to Kagan analyst Mohammed Hamza.
Vodafone has been on a spending spree to strengthen its fixed-line base across Europe in recent years. It acquired Kabel Deutschland in 2013 and then bought Spanish cable player ONO a year later.
In 2016, it also completed a Dutch joint venture with Liberty to create the Netherlands’ second-largest mobile and cable operator, but failed to reach a similar deal in Britain.
Vodafone is completing efforts to merge its Indian assets with Idea Cellular Ltd in a deal valued at $23.2 billion. The move — a response to competitive pressure from the 2016 launch of low-cost rival Reliance Jio — follows a €5 billion write-down on its India business.
(Backgound information from Kagan, S&P Global Market Intelligence)
