03 January 2018
| Alan Burkitt-Gray
Deutsche Telekom has made its second European acquisition in a few weeks by buying Liberty Global’s Austrian operation for €1.9 billion.
The company said it will merge UPC Austria – the
country’s largest cable operator – with
its own T-Mobile Austria, to create a quad-play company that
will challenge A1 Telekom Austria, the incumbent.
"With this acquisition Deutsche Telekom is taking another major
step to realize our strategy to become a fully converged
operator in our European footprint," said Srini Gopalan,
Deutsche Telekom’s board member for Europe.
"The acquired cable network will be a perfect match with our
best mobile network. It will allow customers to benefit from
extended scope of services with fixed and mobile offerings from
one source. We see a significant potential to accelerate growth
in the Austrian market."
The move comes days after Deutsche Telekom announced a plan to buy
Tele2’s Netherlands operation for €190
million. Tele2 will have a 25% stake in the combined fixed and
mobile operation in the Netherlands.
T-Mobile has 5.2 million customers in Austria, while
UPC’s network in the country passed 1.4 million
homes and served 654,000 customers. Of those, 513,000 took
broadband – making UPC the second biggest in the
market after A1 Telekom Austria. UPC’s customers
take 450,000 voice and 468,000 video services. It also has
56,000 mobile customers, provided via a mobile virtual network
agreement with Hutchison, which operates its own Three
According to Deutsche Telekom, the combined revenue for the two
operations in Austria will be €1.2 billion. Andreas
Bierwirth, CEO of T-Mobile Austria, said: "Broadband is the
indispensable foundation for a digital Austria. It is our
ambition to provide our customers, whoever and wherever they
are, with the best possible seamless broadband experience for
all of their needs through LTE, digital cable, fibre and future
technologies like 5G."
Deutsche Telekom will acquire UPC’s dense urban
fibre network in Austria to add to its own fibre core network.
It will continue to use the UPC brand for up to three years
after the deal is complete. The companies said they expected
the takeover to close in the second half of the year, subject
to regulatory approval.
Liberty Global CEO Mike Fries said: "This transaction
highlights the strategic and financial value of our fibre-rich
networks in a rapidly converging world and the significant
synergies inherent in fixed-mobile mergers. We have operated in
Austria for over 20 years and are extremely proud of the
market-leading position we’ve built in both
digital video and super-fast broadband."
Fries added: "We believe the combination of UPC Austria and
T-Mobile Austria will provide the national scale necessary to
compete with larger companies like A1, and provide residential
and business consumers with the highest quality services at the
● Liberty Global announced that its Liberty Latin America
operation yesterday became a legally separate company. Shares
in the new company, which has annual revenues of $3.7 billion,
will be publicly traded on Nasdaq.
The new Liberty Latin America includes Cable & Wireless
Communications and its subsea network, as well as a cable and
telecoms business in Latin America and the Caribbean plus the
"The split-off of our Latin American and Caribbean operations
from Liberty Global will ensure that this new company will have
access to the capital and resources necessary to achieve
superior financial and strategic growth," said Fries, who is
and executive chairman of Liberty Latin America as well as CEO
of Liberty Global.
Balan Nair, president and CEO of Liberty Latin America, said:
"We see significant prospects for long-term growth both
organically as well as through strategic M&A."