Cantillon: Vodafone eyes pay-TV options

The acquisition of Spanish cable operator Ono is just part of its strategic spree

Vodafone, the world’s second-largest wireless carrier, agreed to buy Spanish cable operator Ono in a €7.2 billion deal to boost TV and broadband offerings. Photograph: Jason Alden/Bloomberg

Vodafone, the world’s second-largest wireless carrier, agreed to buy Spanish cable operator Ono in a €7.2 billion deal to boost TV and broadband offerings. Photograph: Jason Alden/Bloomberg

 

Vodafone is a telecoms giant on track to realise its ambition of becoming a broadband and television platform provider. Soon there will be little to distinguish between such company categories. The technology has converged, 4G is coming, and the revenue opportunities are driving consolidation in the European communications market.

On Sunday, the world’s second-largest mobile carrier agreed to buy Spanish cable operator Ono, which offers high- speed broadband and pay-TV packages to 1.9 million customers. The €7.2 billion deal is not a one-off purchase, but part of a game-changing acquisition spree financed by Vodafone’s $130 billion sale of its stake in US mobile phone operator Verizon Wireless.

Even before it was boosted by these proceeds, Vodafone had embarked on a prowl for fixed-line assets, buying Cable & Wireless Worldwide in 2012 and last year paying €7.7 billion for Germany’s Kabel Deutschland. In February, it indicated that it has an acquisitions war chest of €21-€29 billion and that no deal would be too big if it made strategic sense.

Separately, chief executive Vittorio Colao confirmed its plans to enter the UK television market, adding it “was in discussions with content owners”. Whatever BT can do, it can do better, may well be the message emanating from the Newbury, UK-based company.

Bidding battles for premium sports, movie and HBO-type television content look set to continue to be waged by a handful of the big players, notably BT and BSkyB, which is still the leader on the rights side. Indeed, a mooted tie-up between Vodafone and BSkyB may prove the easiest method for both companies to knock back the challenge of a daring BT.

Another possibility, however, is that Vodafone could use up the rest of its cash pile – and then some – to bid for UPC-owner Liberty Global, the John Malone company that is itself no stranger to acquisitions and had fancied adding Spain’s Ono to its own list of cable assets.

Just to muddy the waters, Vodafone remains of interest to AT&T, the US telecoms company that fancies a play on Europe’s embrace of 4G. A heavy workload for competition regulators awaits.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.