February 2, 2016
Vodafone and Liberty Global, two of Europe's leading communications network operators, are in discussions regarding "the creation of a joint venture in the Netherlands that would incorporate both companies' local operating businesses."
The duo made it clear, though, that the talks are still ongoing and are limited to the Dutch market.
Vodafone Group plc (NYSE: VOD), which has national 4G coverage in the Netherlands, has 5.13 million mobile and 73,000 fixed broadband Dutch customers (end of September 2015), generating revenues of £693 million (US$997 million) in the six months to September 30.
Liberty Global Inc. (Nasdaq: LBTY), through its Ziggo operation, has 4.1 million customers, all of which subscribe to its pay-TV services. In addition, 3.1 million use its broadband service (up to 200 Mbit/s) and 2.5 million take Ziggo's voice service. It has also signed up 181,000 mobile customers. In total, Ziggo generates annualized revenues of around $2.8 billion.
Operating as an MVNO in the Dutch market, Ziggo is reportedly using the network of Vodafone Netherlands, giving the two companies an existing relationship on which they can build. Light Reading is seeking confirmation from Vodafone on whether it is Ziggo's wholesale provider.
Should the two companies complete a merger, it would create a very strong rival to national incumbent KPN Telecom NV (NYSE: KPN).
The announcement comes only weeks after Liberty CEO Mike Fries said he still harbored further M&A ambitions in both Europe and Latin America and only a few months after the two companies abandoned broader asset swap talks. (See Vodafone, Liberty Call Off Asset-Swap Talks and Liberty Global Sees More M&A Coming.)
Liberty Global is the largest cable operator in Europe, with operations in 12 markets. Vodafone, meanwhile, is a global mobile operator giant that has been diversifying into cable services in Europe through acquisitions in Germany and Spain in recent years. (See Euronews: Vodafone Strikes €7.7B Kabel Deal and ONO Says Yes to Vodafone.)
The Netherlands can be a slightly confusing market for those outside of Europe, as the country can also be referred to as Holland and the people who live there are known as the Dutch (see the video below).
— Ray Le Maistre, , Editor-in-Chief, Light Reading
Read more about:Europe
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