Telefónica gets German wholesale access as EU approves €18bn Vodafone/Liberty Global deal

18 July 2019 | Alan Burkitt-Gray

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Vodafone expects to complete its €18.4 billion takeover of Liberty Global’s eastern European business in less than two weeks, following today’s European Commission approval.

But Telefónica has also gained, because it will have wholesale access to the expanded Vodafone broadband network in Germany.

The Liberty Global acquisition, first announced last year, will expand Vodafone’s European business so that it will have 116 million mobile customers, 24 million broadband customers and 22 million TV customers across 13 countries. Vodafone said today it expects to complete the acquisition by Wednesday 31 July.

Nick Read (pictured), group CEO of Vodafone, said this morning: “With the European Commission’s approval of this transaction, Vodafone transforms into Europe’s largest fully-converged communications operator, accelerating innovation through our gigabit networks and bringing greater benefits to millions of customers in Germany, the Czech Republic, Hungary and Romania. This is a significant step toward enabling truly digital societies for our customers.”

European Commissioner Margrethe Vestager, in charge of competition policy, said: “In our modern society access to affordable and good quality broadband and TV services is almost as asked for as running water.” As well as Germany, the acquisition covers Liberty Global operations in the Czech Republic, Hungary and Romania.

The deal sees Vodafone add Liberty Global’s Unitymedia to its existing cable business in Germany. “These networks do not overlap,” said the Commission today. “However, Vodafone is also active in the supply of fixed broadband services in the areas served by Unitymedia, via wholesale access to Deutsche Telekom’s network.”

As a remedy, Telefónica will have access to the expanded cable operation’s network. This will allow Telefónica, which uses the O2 brand in Germany, “to compete more effectively in the provision of fixed broadband services in Germany”, said the Commission, and to offer TV services.

Read said that Telefónica will be able to deliver download speeds of up to 300Mbps via the combined Vodafone broadband network.

“In Germany, Vodafone will deliver gigabit mobile speeds to 20 million people by 2021 and fixed gigabit connections to 25 million households by 2022,” said Read. “The combined company will be well placed to help deliver the German government’s digital ambitions, providing sustainable and effective competition and choice in digital infrastructure and converged services.”