Vodafone and Liberty Global could create a joint-venture in the Netherlands to take on former state-owned telco – could they do the same in the UK?
Vodafone and Virgin Media’s parent company Liberty Global are investigating the possibility of creating a joint-venture in the Netherlands, reigniting speculation that the two parties might want to work together in the UK in the future.
The proposed joint-venture would combine Vodafone Netherlands, the country’s second largest mobile operator behind KPN, and Ziggo – the largest Dutch cable operator, which was bought by Liberty Global in 2014.
It is thought that a union of the two businesses would be better equipped to compete with the former state-owned KPN as Vodafone has no fixed line assets in Holland, while Ziggo has no mobile network other than an existing mobile virtual network operator (MVNO) powered by Vodafone’s infrastructure.
Vodafone Liberty Global
“Following recent media speculation, [Vodafone] confirms it is in discussions with [Liberty Global] regarding the creation of a joint venture in the Netherlands that would incorporate both companies’ local operating businesses,” said Vodafone. “The discussions are ongoing and do not extend beyond the creation of a joint venture in the Netherlands.
“There is no certainty as to when or whether any transaction will be agreed.”
Despite Vodafone’s assertion that the scope of the talks is limited to the Netherlands, it does raise the possibility of further cooperation. Last year, the two firms discussed a potential “exchange of assets”, which could have involved Vodafone’s UK network or Virgin Media.
Vodafone has only recently dipped its toes into the fixed broadband and television markets in the UK, while Virgin Media does not have a mobile network, instead relying on a long-standing MVNO agreement with EE.
Both parties might feel a merger would be beneficial given the trend towards convergence in the British communications sector and the increasing popularity of ‘quad-play’ services.
However these previous discussions came to an end late last year with no agreement.
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