Light Reading

Vodafone to Buy ONO for €7.2B

Light Reading
News Wire Feed
Light Reading

NEWBURY, UK -- Vodafone Holdings Europe S.L.U. ("Vodafone") announces today that it has agreed to acquire 100% of the share capital of Grupo Corporativo Ono, S.A. ("Ono" or the "Company") for a total consideration equivalent to €7.2 billion (£6.0 billion) on a debt and cash free basis (the "Transaction").

Ono has the largest next-generation network ("NGN") in Spain, with approximately 7.2 million homes released to marketing in 13 of Spain's 17 regions, reaching more than 300 municipalities, including the nine largest cities. Ono offers fixed and mobile communications and television services to approximately 1.9 million customers.

Ono is the leading NGN operator in Spain with 7.2 million homes released to marketing (equivalent to 41% of total homes in Spain), providing its customers with broadband speeds in excess of 200 Mbps and the country's most innovative pay-TV service through TiVo.

Ono has invested approximately €7 billion in its network since 1998. This has been built to a high standard with a consistent design across the entire footprint to deliver high speed broadband and telephony services. The network has a future-proof fibre architecture with 500 homes per node and abundant spare capacity within its 862 MHz spectrum. It has been fully upgraded to DOCSIS 3.0, and further upgrades to network speeds and capacities can be achieved at relatively limited cost as Ono owns circa 96% of ducts in its access network.

The Transaction enables Vodafone to take advantage of the rapid increase in the adoption of unified communications products and services in the Spanish market and provides Vodafone with immediate access to 7.2 million homes at a significant time-to-market advantage. Ono's network is complementary to Vodafone's fibre-to-the-home ("FTTH") build programme which will be refocused towards areas where Ono has limited or no network presence. Vodafone intends to complete its FTTH rollout to 1.5 million homes passed, providing it with access to a NGN network covering up to 10 million homes released to marketing, equivalent to 57% of total Spanish homes.

The Transaction is expected to generate significant cost and capex savings with an annual run-rate of approximately €240 million (£200 million), before integration costs, in the fourth full year post completion, equivalent to a net present value of €2.0 billion (£1.7 billion) after integration costs. The savings will be primarily derived from utilising Ono's network for mobile backhaul, limiting Vodafone's FTTH build plan to the initial 1.5 million homes passed, the rationalisation of overlapping activities and the migration of Ono's mobile traffic to Vodafone's network.

Vodafone will be able to leverage its extensive distribution network to increase the penetration of Ono's homes released to marketing, which is currently lower than any other major European cable operator. There is also a significant opportunity to cross-sell Ono's high quality broadband, fixed telephony and pay-TV offerings to Vodafone's existing customers. Vodafone also expects to be able to cross-sell its mobile services to Ono's customers and offer new services, using both companies' product sets and networks. Vodafone estimates revenue synergies with a total net present value of approximately €1.0 billion (£0.8 billion) after integration costs.

The Transaction values Ono at a multiple of 7.5x 2013 EBITDA and 10.4x 2013 OpFCF adjusted for cost and capex synergies. The Transaction comfortably meets Vodafone's M&A criteria and is expected to be accretive to Vodafone's adjusted EPS and FCF per share after cost and capex and before integration costs from the first full year post completion.

Vodafone values the expertise of Ono's management team and employees and will work closely with them to support the integration with Vodafone. As in similar recent transactions, Vodafone would expect Ono's management to become an integral part of the local management team, focused on the broadband, fixed telephony and pay-TV segments of the combined business. Ono's employees will also benefit from a broader range of international career opportunities available across the Vodafone Group.

Vodafone Group plc (NYSE: VOD)

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
Steve Saunders provides an overview of white box networking and introduces a new "slim line" version of the OSI 7-layer model.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Wagner’s Ring
The Business Case for Open Source

11|30|15   |     |   (1) comment

Open source helps companies enhance infrastructure, undermine competitors' advantage and teach collaboration. But there are problems.
Between the CEOs
Centec on Ethernet Switching

11|26|15   |   09:58   |   (0) comments

Centec CEO James Sun talks to Steve Saunders about Ethernet switching and the white box revolution.
LRTV Custom TV
Delivering Service Agility in the Virtualization Era

11|25|15   |   5.41   |   (0) comments

Interview with Massimo Fatato, WW OSS Business Lead, Hewlett Packard Enterprise.
Wagner’s Ring
How Might Open Source Fail?

11|24|15   |     |   (10) comments

Open source, SDN, and NFV are looking inevitable – but performance, standards proliferation and regulatory capture could derail the movement.
LRTV Custom TV
NFV Lifecycle Orchestration – a Fresh Vision for Telco

11|23|15   |   6.40   |   (0) comments

Simon Osborne, CTO Comptel, and Heavy Reading's Caroline Chappell reveal the business impacts of new SDN and NFV, and what the term service orchestration actually means. Together they define Lifecycle Service Orchestration and how the virtualized future will look for telecoms operators.
Between the CEOs
Cisco's Virtual Role in Saudi

11|20|15   |   12:15   |   (2) comments

Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
LRTV Huawei Video Resource Center
Huawei Leads With Kubernetes for Cloud PaaS

11|19|15   |   08:26   |   (0) comments

Huawei is looking to Kubernetes as a key tool for building robust open source technologies for customers and partners, said Ying Xiong, chief architect of cloud platform at Huawei, in an interview with Light Reading West Coast Bureau Chief Mitch Wagner at the recent Kubecon conference.
Women in Comms Introduction Videos
WiC in London: The Highlight Reel

11|19|15   |   5:33   |   (1) comment

NetCracker's Mervat El Dabae headlines an inspiring morning in London with help from leading women from Vodafone, TalkTalk, Hyperoptics and Ciena.
LRTV Documentaries
Why Saudi's So Hot for New Tech

11|19|15   |   05:07   |   (0) comments

Light Reading's Steve Saunders reports from Saudi Arabia, a hyper-competitive market desperate to embrace the next generation of communications technologies and services.
LRTV Custom TV
Why Data Models Deliver More Value Than Information Models

11|19|15   |   5.08   |   (0) comments

Stefan Vallin argues that more automation is needed to manage end-to-end services and the hybrid networks they run on, and that data models are key to achieving this.
Telecom Innovators Video Showcase
SDN Management & Orchestration in the WAN

11|17|15   |   7.20   |   (0) comments

Carol Wilson and Packet Design CTO Cengiz Alaettinoglu discuss CSPs' SDN service delivery and assurance requirements. Learn about a modular approach to building automated control, orchestration and management functions for the WAN that are policy- and analytics-driven.
LRTV Custom TV
Flash Networks: Optimizing for Radio Spectral Efficiency

11|17|15   |   3:34   |   (0) comments

Today most optimization vendors only focus on optimizing voice or data. Ofer Gottfried, Flash Networks' CTO, shows how improving data throughput and maximizing spectral efficiency reduces capital and operating expenses while also providing a platform for user engagement.
Hot Topics
Samsung: No Sale of Wireless Unit
Dan Jones, Mobile Editor, 11/25/2015
Hong Kong Moments
Ray Le Maistre, Editor-in-chief, 11/26/2015
Facebook in Africa: Beauty or Beast?
Iain Morris, News Editor, 11/27/2015
Cable Gives Thanks for Business Services
Alan Breznick, Cable/Video Practice Leader, 11/27/2015
Networking Shines in HP's Gloomy Final Earnings
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/25/2015
Like Us on Facebook
Twitter Feed
December 15, 2015
Virtualizing Cable Services
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Centec CEO James Sun talks to Steve Saunders about Ethernet switching and the white box revolution.
Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
Cats with Phones
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and for copper plant evolution and the various deployment possibilities for FTTH/B.