Vodafone and Virgin Media could exchange assets as more talks begin. What does this mean for Vodafone UK and Virgin Media?
Vodafone is holdings discussions with Virgin Media’s parent company Liberty Global regarding a possible swap of telecoms assets.
Liberty Global owns a number of cable companies across Europe, including UPC, while Vodafone operates mobile networks in several countries.
The two firms first held talks in 2015 but 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.
Vodafone Virgin Media
“Vodafone confirms that it is in early stage discussions with Liberty Global regarding the potential acquisition of certain overlapping continental European assets owned by Liberty Global,” said a Vodafone spokesperson.
“There is no certainty that any transaction will be agreed, nor as to the terms, timing or form of any transaction.
“Vodafone is not in discussion with Liberty Global regarding a combination of both companies.”
It is unclear if the UK is a market under discussion.
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. It would also be better equipped to compete with BT and EE on converged networks.
However since the last talks, Vodafone has launched is home broadband service and is working with CityFibre planned to bring fibre to the premise (FTTP) connectivity to a number of major UK cities. While this would not make any tie-up impossible, it would be more complicated than in 2015.
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