American cable giant Liberty Global, which also is the owner of Virgin Media, has agreed to sell most of its European assets to Vodafone.

The development came after Vodafone was reported in February to once again holding discussions regarding a possible swap of telecoms assets.

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.

European assets

And now Vodafone is to acquire Liberty Global’s operations in Germany, the Czech Republic, Hungary and Romania for18.4 billion euros (£16.1bn).

The deal will allow Vodafone to expand its mobile, cable television and broadband services across Europe.

Indeed, Vodafone claims the deal will see it become “leading next generation network (NGN) owner in Europe, with 54 million cable/fibre homes ‘on-net’ and a total NGN reach of 110 million homes and businesses, including wholesale arrangements.”

“This transaction will create the first truly converged pan-European champion of competition,” said Vodafone chief executive Vittorio Colao. “It represents a step change in Europe’s transition to a Gigabit Society and a transformative combination for Vodafone that will generate significant value for shareholders.”

“We are committed to accelerating and deepening investment in next generation mobile and fixed networks, building on Vodafone’s track record of ensuring that customers benefit from the choice of a strong and sustainable challenger to dominant incumbent operators,” Colao added. “Vodafone will become Europe’s leading next generation network owner, serving the largest number of mobile customers and households across the EU.”

German domination?

But the deal is sure to draw close scrutiny from competition authorities, and Deutsche Telekom, Europe’s largest telecoms provider by revenue and owner of T-Mobile, has already objected to the move.

Deutsche Telekom’s chief executive, Timotheus Höttges, was quoted by the BBC as saying in February 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.

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.

And now as part of the Liberty Global deal, it is purchasing Unitymedia, Germany’s second-largest cable operator.

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

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Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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