Amidst the continuing consolidation in the mobile market Vodafone has fond itself to be the smallest outfit in its home market, the UK. After expressing its concern with BT acquiring EE and what that will mean for the UK market Vodafone has hinted they will be looking to respond with acquisitions themselves. Liberty was highlighted early on as a likely target.
Vodafone confirms that it is in the early stages of discussions with Liberty Global regarding a possible exchange of selected assets between the two companies.
There is no certainty that any transaction will be agreed, nor is there certainty with respect to which assets will ultimately be involved.
Vodafone is not in discussions with Liberty Global concerning a combination of the two companies
Imran Choudhary, consumer insight director at Kantar Worldpanel commented “Vodafone has lagged behind its peers in the recent flurry of mergers and acquisitions and has been at risk of being muscled out of the mobile market by giants such as BT/EE and Three/O2, as well as new entrants like Talk Talk and Sky. The UK is moving toward a quad play market, but currently Vodafone has no UK TV or home broadband propositions. Access to Liberty’s UK broadband infrastructure, which currently serves one fifth of the country via Virgin Media, would allow Vodafone to offer its customers internet packages alongside the cloud-based TV service it plans to launch at the end of 2015. By agreeing to asset swaps, Vodafone has identified a way to keep up with the competition without embarking on a full-blown merger.
“The consolidation of the mobile market is good news for consumers in the short term as the major players offer attractive deals to win customers while they jostle for dominance. In the longer term, however, fewer players in the market will naturally mean less competition and less pressure to keep prices low.”