Vodafone to buy Spanish telecoms company Ono for $10 billion, expanding further in Europe
LONDON - British telecommunications company Vodafone agreed on Monday to buy Spain's Ono for 7.2 billion euros ($10 billion) as it seeks to expand operations across Europe.
The deal is part of a broader trend of mergers and takeovers in Europe, where the mobile industry is split among some 150 major operators crisscrossing national lines â€” compared to just four in the United States.
Grupo Corporativo Ono S.A. provides phone, mobile and television services to 1.9 million customers and has the largest "next-generation network" in Spain, reaching 7.2 million homes, or 41 per cent of the country. Vodafone says Ono has abundant spare capacity, giving it space to expand.
"Demand for unified communications products and services has increased significantly over the last few years in Spain, and this transaction - together with our fiber-to-the-home build program - will accelerate our ability to offer best-in-class propositions in the Spanish market," Vodafone Chief Executive Vittorio Colao said in a statement.
Vodafone is flush with cash after agreeing last year to sell its stake in a U.S. venture to Verizon for $130 billion in cash and stock â€” one of the biggest deals in corporate history.
Monday's deal marks Vodafone's second major acquisition in Europe, after its purchase of Kabel Deutschland last year. Vodafone was attracted by Kabel Deutschland's extensive cable network, which it could use to expand its fixed-line, broadband and television business.
The deal allows Vodafone to accelerate its expansion in Europe, save costs in its Spanish operations and take advantage of the rapid increase in the adoption of unified communications products and services in the Spanish market. Ono has invested approximately 7 billion euros in its network since 1998.
Analysts were divided over the potential benefits of the deal.
"Spain has been the source of losses for several quarters, and bundling Vodafone's mobile services with popular broadband and cable TV offerings is the only realistic choice to drive up customer retention, new subscribers and per-customer revenues," said Jason Sumner, technology analyst at The Economist Intelligence Unit.
But James Barford, an analyst at the London-based firm Enders Analysis, said the price was high and was skeptical that the focus on "quad play" â€” the industry term for bundling phone, broadband, mobile and TV services â€” will pay off.
"It's a little bit the tail wagging the dog in terms of justifying such a high cost," he said. "There's an assumption that 'quad play' is essential, but there really isn't evidence that consumers have a strong desire to buy the fixed line and the mobile services together."
Associated Press writer Sylvia Hui contributed to this story.
Read more Business News
- $50M for rail corridorCentral Okanagan - 1:38 pm
- Vibey is home!Kelowna - 4:44 pm
- Crash driver allegedly impairedKelowna - 2:57 pm
- Fruitful weatherCentral Okanagan - 12:56 pm
|QHR Technologies Inc||1.21||0.00|
|Anavex Life Sciences||0.26||0.00|
|Copper Mountain Mining||2.88||-0.04|
|Sunrise Resources Ltd||0.025||-0.005|
|Mission Ready Services||0.215||-0.015|
Establishing a joint account may seem like a great strategy at first glance. However, there are many factors that must be considered before taking this action. This article will explore the use of &ls...
Let’s face it; nobody wants to pay for legal services if they do not have to, but if you have been injured in an accident you may have thought about hiring a lawyer to help you navigate your cla...
My screen printing business, like many others, started as a one-man operation. It was located in a small building, not much better than a shack, with a telephone, a big table where I ate lunch and (oc...