Light Reading

ONO Says Yes to Vodafone

Ray Le Maistre
3/17/2014
50%
50%

Vodafone has dipped into its fat wallet, swelled by the recent sale of its US assets, and struck a €7.2 billion (US$10 billion) deal to buy Spanish cable operator ONO, the two companies announced Monday morning, ending weeks of speculation. (See Vodafone to Buy ONO for €7.2B and Vodafone Agrees to $130B Verizon Stake Sale.)

The deal, which carries no debt or cash, adds 1.9 million customers (including about 120,000 small businesses) to Vodafone's operation in Spain, where it already has 13.6 million mobile customers and where it is building out fiber-based fixed broadband connections to 1.5 million Spanish homes. The deal will also swell Vodafone's headcount by about 2,500 staff. (See Euronews: €1B Boost for Spanish FTTH.)

Vodafone Group plc (NYSE: VOD) aims to take advantage of ONO 's relatively modern network infrastructure, in which the Spanish operator has invested €7 billion ($9.74 billion) since 1998, and sell bundled services to the 7.2 million homes passed by ONO's access network. ONO has upgraded its entire network to DOCSIS 3.0 and offers cable broadband at speeds in excess of 200 Mbit/s, while its video service includes a Tivo-based option. Vodafone is in the process of upgrading its Spanish mobile network to 4G LTE. (See Euronews: Vodafone Wins Spain's 4G Race, TiVo Surpasses 2.5 Million Subscribers in Europe, and ONO Will Go Full Throttle.)

ONO, which was set for an IPO and which has also attracted acquisition interest from European cable giant Liberty Global Inc. (Nasdaq: LBTY), generated revenues of €1.6 billion ($2.23 billion) and reported a slight net loss of €25 million ($34.8 million) in 2013. (See Euronews: Vodafone Homes In On ONO.)

The ONO acquisition deal had been expected by the financial markets, and so has had little impact on the mobile operator's stock. Vodafone, which has more than 410 million mobile customers worldwide, and which generated revenues of £11 billion ($18.3 billion) in its fiscal third quarter that ended December 31, 2013, saw its share price rise by 3 pence, or 1.3%, to 225 pence on the London Stock Exchange at lunchtime.

The ONO deal is the latest move in a battle between Vodafone and Liberty Global to dominate the European cable services market. (See Euronews: Rivals Set for Cable Asset Battle.)

Liberty is seeking economies of scale from acquisitions such as Virgin Media in the UK and Ziggo in the Netherlands, while also seeking to add its own mobile services to its existing triple-play packages. (See Euronews: Liberty Global Plans Pan-European MVNO, Liberty Global to Buy Ziggo for €10B, and Liberty Makes $23.3B Play for Virgin Media.)

Vodafone, meanwhile, is seeking to combine its mobile, fiber-based fixed broadband, and enterprise services with cable network assets that can add video delivery, additional high-speed broadband, and data transport (including mobile backhaul) capabilities to its European assets. The mobile giant recently completed the acquisition of cable operator Kabel Deutschland GmbH , a move that gives it more than 32 million mobile subscribers, around 5 million broadband, and 7.6 million cable TV customers in Germany. (See Euronews: Vodafone Clears Hurdle to Kabel Bid and Vodafone Germany And Kabel Deutschland Integration To Begin From 1 April 2014.)

— Ray Le Maistre, Editor-in-Chief, Light Reading Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
albreznick
50%
50%
albreznick,
User Rank: Blogger
3/18/2014 | 9:02:59 PM
Re: Competitive landscape
good question, Mitch. It should boost the competitive landscape in voth Spain and all of Europe, especially if it keeps Liberty Global from being an even bigger goliath than it already is. .  
albreznick
50%
50%
albreznick,
User Rank: Blogger
3/18/2014 | 9:01:22 PM
Re: What's in an acronym?
It probably doesn't have quite the same meaning in Spanish. So I doubt they worried about that. :) 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/17/2014 | 12:49:14 PM
Competitive landscape
Will this deal have a significant effect on the competitive landscape in Spain? In Europe in general? Sounds like ONO was a relatively small company, with some technology that might be significantly helpful to Vodafone, making the acqusition an improvement for competition. 
Ariella
50%
50%
Ariella,
User Rank: Light Sabre
3/17/2014 | 10:55:17 AM
What's in an acronym?
I wonder didn't ONO do any market research that warned the company off adopting a name that sounds like, Oh no? They could have adopted Mr. Bill as their mascot. 
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
Against the odds, Huawei is growing its telecoms networking equipment business in the US -- that should be ringing some alarm bells for domestic vendors.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
CEO Chat With Jeff Miller, ActiveVideo

8|28|15   |   19:05   |   (0) comments


Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
LRTV Huawei Video Resource Center
Vodafone: Mobile Money Is About Customer Trust

8|27|15   |   06.36   |   (0) comments


Light Reading spoke with Vodafone's Ian Ravenscroft about the unique responsibilities and opportunities facing operators handling customers' financial transactions over the network.
Telecom Innovators Video Showcase
Palo Alto Networks on Expanding in the Carrier/Service Provider Market

8|26|15   |   07:54   |   (0) comments


Alfred Lee from Palo Alto Networks tells Steve Saunders about their new chassis-based system, the PA-7080, and how it can benefit service providers compared to legacy firewalls.
LRTV Custom TV
Global Services Forum Preview

8|25|15   |   02:36   |   (0) comments


Light Reading's CEO and Founder Steve Saunders talks about Huawei's upcoming Global Services Forum with the help of Heavy Reading's Patrick Donegan and Teresa Mastrangelo.
Telecom Innovators Video Showcase
Infoblox on DNS Threat Index

8|19|15   |   04:39   |   (0) comments


Dilip Pillaipakam from Infoblox talks to Steve Saunders about his company's core network services.
Between the CEOs
CEO Chat With Ihab Tarazi, Equinix

8|14|15   |   20:18   |   (1) comment


Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about the dramatic changes in the data center, cloud and interconnect markets and discusses the impact of SDN and NFV in the coming years.
Telecom Innovators Video Showcase
The Netformx Ecosystem

8|14|15   |   09:39   |   (1) comment


Ittai Bareket, CEO of Netformx, talks with Steve Saunders about the Netformx Ecosystem, which employs cutting-edge prescriptive analytics to help solution providers maximize profits.
Telecom Innovators Video Showcase
Versa Networks on Leveraging VNFs

8|12|15   |   07:37   |   (0) comments


Kumar Mehta, founder and CEO of stealth mode startup Versa Networks, talks with Steve Saunders about how providers can best leverage virtualized network functions (VNFs).
LRTV Custom TV
Transforming the Network Through OPNFV

8|5|15   |   7:09   |   (0) comments


Sandra Rivera, VP Data Center Group; GM Network Platforms Group, Intel Corporation, on OPNFV Arno and how the industry is coming together to accelerate the deployment of NFV and transform the network.
LRTV Huawei Video Resource Center
Huawei ONS Product Demo

8|3|15   |   6:01   |   (0) comments


Huawei shows at Open Networking Summit 2015 in Santa Clara how its SDN and NFV solutions embrace openness.
LRTV Custom TV
End-User or Enterprise Benefits to the New IP

7|30|15   |   04:27   |   (1) comment


Andrew Coward discusses what the New IP means to end users or enterprise customers. He explains compelling reasons, including how every customer can get their own network, from the transformation to the New IP.
LRTV Custom TV
Network Visibility & the New IP

7|30|15   |   02:23   |   (0) comments


Mukund Srigopal provides an explanation of what network visibility is and how it is essential as service providers transition to the New IP. In addition, the importance of the network packet broker is discussed.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Cisco's cloud and virtualization portfolio can increase business agility and innovation by building a more flexible network architecture.
Hot Topics
Verizon Hums a Driving Tune
Sarah Thomas, Editorial Operations Director, 8/26/2015
Gogo Approved to Speed Up In-Flight WiFi
Sarah Thomas, Editorial Operations Director, 8/24/2015
Could Market Volatility Hurt Tech IPOs?
Dan Jones, Mobile Editor, 8/24/2015
Sprint's Claure: '3 to 5 Years' to Turnaround
Dan Jones, Mobile Editor, 8/25/2015
Like Us on Facebook
Twitter Feed
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about data center, cloud and the impact of virtualization in the coming years.
Cats with Phones
Cats Are a Smartphone's Best Friend Click Here
Whoever said cats didn't live to please their humans?