September 22, 2021
The billionaire entrepreneur Xavier Niel has agreed to another deal that will enable the Iliad group to create a new fixed-mobile telecoms player in a major European market.
Currently engaged in buying up all shares he does not own in Iliad, with the aim of taking the group private, Niel has also found time to secure a further acquisition in Poland.
The move comes just under two months after Iliad made an indicative offer for UPC Poland on July 30.
Iliad's logic behind this latest acquisition is clear: "Together, both operators will become the second-largest telecom operator in the Polish market with 2020 combined revenues of €1.96 billion ($2.3 billion) and 2020 combined EBITDAaL of €697 million ($817 million)," Iliad said.
The transaction is to be financed from available cash and debt issuance at Play's level and is expected to close in the first half of 2022 after clearance by the relevant authorities.
UPC Poland passes 3.7 million homes with its cable network and has 1.5 million subscribers — most of which are fixed broadband and TV subscribers, although it exceeded 100,000 mobile subscribers for the first time this year. It generated PLN 1.698 billion ($430 million) in revenue and PLN 757 million ($191 million) in EBITDAaL in 2020.
Iliad has also previously agreed a deal with Cellnex that saw the Spanish tower company buy 60% of the business that manages Play's mobile passive infrastructure, covering some 7,000 sites. Play has retained the remaining 40% stake.
For Iliad, the move marks a further step in its ambition to become a leading European telecom player. The group has already said it became Europe's sixth-largest mobile operator by number of subscribers (excluding M2M) following the acquisition of Play in in November 2020.
Thomas Reynaud, CEO of Iliad group, indicated that Iliad plans to accelerate investment in fiber network deployment.
"At Iliad/Play we are determined to invest in next-generation mobile and broadband networks and services. This long-term ambition to foster nationwide connectivity will contribute to the digital transformation of the Polish economy and benefit the consumers and businesses with more innovative and comprehensive offers," he said.
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UPC has been expanding its offer of 1Gbbit/s speeds in Poland following the deployment of DOCSIS 3.1 technology from 2018 onwards. The cableco has also agreed to use the Fiberhost open fiber network operated by rival operator INEA.
Liberty Global, meanwhile, has been gradually shedding cable assets in Europe in recent years in order to focus on more profitable operations with healthier pay-TV and broadband markets: Virgin Media O2 in the UK; Virgin Media in Ireland; Sunrise UPC in Switzerland; Telenet in Belgium; and the 50/50 joint venture with Vodafone Group in the Netherlands, VodafoneZiggo. It also still owns UPC in Slovakia.
In 2019, Vodafone also acquired Liberty Global's assets in Germany, Hungary, Romania and the Czech Republic for €18.4 billion ($21.5 billion).
— Anne Morris, contributing editor, special to Light Reading
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