Consolidation of European telecoms sector apace
PARIS, France
WITH the US$10-billion purchase of Ono by Vodafone and Numericable closing in on snapping up SFR the consolidation of the European telecoms sector is gathering pace as operators scramble to ensure they can offer the latest high-speed services to satisfy clients.
On Monday the British mobile phone giant announced the (euro) 7.2 billion purchase of Ono, which boasts the largest fiberoptic network in Spain with 7.2 million households connected.
“The acquisition highlights a key trend across Europe of consolidation between mobile and pay TV operators, with operators in both segments looking to utilise their existing customer relationships to sell converged services,” said analysts at IHS in London.
Vodafone last year picked up Kabel Deutschland, which is the country’s largest cable operator, with 8.4 million household subscribers, for (euro) 7.7 billion.
The purchases position Vodafone as one of the leading cable operators in Europe, alongside the US company Liberty Global.
The American company has also been on a buying spree.
In January, it bought Ziggo in a deal that values the Dutch cable operator at (euro) 10 billion, after last year swallowing Virgin Media’s fixed-line telephone, mobile and cable operations for US$23 billion.
Other recent deals include the merger of Portuguese mobile operator Optimus with cable company Zon, and Polish pay-TV firm Cyfrowy Polsat buying the Polkomtel mobile network.
In France, the group Altice, the parent company of the Numericable cable operator, has entered exclusive negotiations to buy SFR, the second-largest mobile operator, for nearly (euro) 12 billion.
While it was chance that the Vodafone-Ono deal was announced just days afterwards SFR’s owner Vivendi picked Altice for exclusive talks, Altice chief executive Patrick Drahi said the trend in the sector is for consolidation.
“This is what is happening throughout the world, and we are deploying the same strategy in France that is be used everywhere,” he said.
“We are in the age of very high speed service” and the trend is towards “bringing together cable and mobile to offer consumers better services.”
The reason for the growing interest of mobile operators in the networks of cable companies is the growing popularity at home of devices and services that require lots data, such as watching videos on tablets and smartphones.
Cable and fiberoptic networks provide high-speed access to homes, where there are increasingly more than one data-hungry devices.
“Cable technology allows offering data speeds similar to fiberoptic, but with a network that is already built, contrary to fiberoptic which must still be hooked up to each household, which will take time,” said Sylvain Chevallier, a telecoms specialist at BearingPoint consultancy.
“This explains the renewed interest for cable operators, who have networks of more than 100 megabits per second immediately available,” he said.
The latest fourth-generation, or 4G, mobile networks, offer similar speeds, but would be hard-pressed to handle all the data traffic without home networks.
Chevallier also noted that consolidation is being fuelled by customers seeking an operator that can offer a full range of services in a package: fixed telephone, mobile telephone, television and Internet.
“In this context, it is becoming critical for an operator that only does mobile to complete their product offer with fixed services, and the only possible solution is a merger with or acquisition of a cable operator,” he said.
Chevalier said Vodafone’s purchase of Ono fits this logic.
AFP