Telefonica Deutschland Calls For Vodafone’s Liberty Purchase Block

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Opposition grows to Vodafone’s European purchases as Telefonica Deutschland demands acquisition block

German regulators are being asked to prevent the sale of the German assets of American cable giant Liberty Global to British operator Vodafone.

In May this year Vodafone agreed to acquire Liberty Global’s operations in Germany, the Czech Republic, Hungary and Romania for18.4 billion euros (£16.1bn).

The main prize in the deal is said to be Germany’s Unitymedia (Germany’s second-largest cable operator), but now the head of Telefonica Deutschland has asked regulators to step in.

Monopoly position?

The CEO of Telefonica Deutschland Markus Haas has according to Reuters called for EU regulators to block Vodafone’s planned acquisition of Liberty Global.

He said would result in a “quasi-monopolisation” of the German cable TV market.

“This takeover would mean the end of competition in the cable market and in the fixed broadband network,” Haas was reported as saying in a statement on Monday.

“We must not allow a quasi-monopolisation of important parts of the infrastructure, which is of decisive importance for the economic future of Germany, to take place.”

Telefonica Deutschland is Germany’s third-largest mobile operator by revenues, but it is not the only German player to express its unease at the Vodafone deal.

Market leader Deutsche Telekom has previously criticised the deal.

Earlier this year, its chief executive, Timotheus Höttges, was quoted by the BBC as saying that any deal was “completely unacceptable”.

“I do not see that this kind of concentration in the cable market can be supported from regulatory bodies,” he reportedly said.

Long term strategy

It should be remembered that Vodafone already owns the largest cable business in Germany after it acquired Kabel Deutschland for 7.7bn euros (£6.7bn) in 2013.

Vodafone had been talking with Liberty Global, which also owns Virgin Media in the UK, for a while now.

The two firms first held talks in 2015 but that resulted in no exchange of assets. However in 2016, the two agreed to merge their respective operations in the Netherlands in a bid to take on incumbent KPN.

Then in February this year Vodafone once again held discussions regarding a possible swap of telecoms assets, before the acquisition was formally announced in May.

By acquiring Liberty Global’s operations in Germany, the Czech Republic, Hungary and Romania, Vodafone will be able to expand its mobile, cable television and broadband services across Europe.

In the UK in 2012 Vodafone acquired the struggling UK telecoms company Cable & Wireless Worldwide (C&WW) for £1 billion.

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Author: Tom Jowitt
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