Vodafone examining UK options, including a move for Liberty: sources

Fri Nov 28, 2014 3:17pm EST
 
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By Anjuli Davies and Kate Holton

LONDON (Reuters) - Vodafone (VOD.L: Quote) is reviewing potential acquisitions, including of Europe's leading cable operator Liberty Global LBTYA.O, to counter the pending consolidation among rivals in Britain, five people close to the matter said.

The internal deliberations at the world's second-biggest mobile operator, have picked up pace in recent days after broadband leader BT Group BT.L revealed it was in parallel talks to buy either EE or Telefonica's 02 (TEF.MC: Quote).

If concluded, BT's foray into mobile is expected to tilt the market toward selling more all-included bundles of fixed and mobile services. That makes it more important for historically mobile-only companies such as Vodafone, EE, 02 and Hutchison's 3 to have their own fixed networks or be condemned to being simple resellers of BT's fiber.

The attraction of Liberty, which is backed by U.S. billionaire John Malone, is its ownership of cable networks capable of carrying very high-speed broadband traffic to homes and business in nearly a dozen European countries.

In Britain, Vodafone would get its hands on the broadband network of Liberty's Virgin Media, which covers around half of the country. That would bolster the broadband network Vodafone got in 2012 when it bought Cable & Wireless.

One person familiar with the situation said Vodafone had approached Liberty Global about a combination earlier this year but found a gulf on price expectations.

A deal would come after Vodafone undertook similar moves by buying the Ono cable company in Spain and Kabel Deutschland in Germany as it seeks to either buy or build fixed-line infrastructure across Europe.

In addition to Liberty, Vodafone is also considering all its options in Britain to bolster its broadband operation including a deal for low-cost player TalkTalk (TALK.L: Quote), although this is seen as a weaker option since the company does not have many fiber lines going into consumers homes.   Continued...

 
A man speaks on his mobile phone as he walks past logos of Vodafone painted on a roadside wall in Kolkata May 20, 2014. REUTERS/Rupak De Chowdhuri