Convergence is the name of the game in Belgium, which is why Orange hopes to hammer out a €1.8 billion cableco deal there.

Following a competitive selection process, Orange revealed on Tuesday that it has been chosen by Belgian conglomerate Nethys to begin exclusive negotiations that could result in Orange acquiring a 75 percent stake in Nethys’ VOO unit.

VOO offers quad-play services in Belgium’s southernmost region Wallonia, and part of Brussels. Its top-end broadband package offers download speeds of up to 400 Mbps.

In a statement, Orange said acquiring VOO would give it the requisite high-speed fixed network assets to reinforce “the deployment of its convergent strategy at a national level.”

At the end of the third quarter, Orange had 3.3 million mobile customers in Belgium and Luxembourg, but just 404,000 fixed broadband customers. Its B2C convergent customer base stood at 325,000. According to the most recent figures from the Belgian Institute for Postal Services and Telecommunications (BIPT), there were 4.7 million fixed broadband connections in Belgium at the end of 2020, with cablecos accounting for more than 50 percent of lines in service, making it a technology familiar to a majority of consumers. In short, this spells opportunity for Orange Belgium.

Point Topic figures from mid-2020 show that incumbent Proximus and cableco Telenet and are the biggest retail fixed broadband providers by market share, accounting for 44.8 percent and 36.2 percent of the market respectively. While VOO is no slouch, it is third by a sizeable margin, with Point Topic putting its market share at 10.3 percent.

Acquiring VOO would therefore give an instant boost to Orange’s customer base, and grow its network footprint. More importantly though, it would improve its position in the quad-play market, which could make all the difference if Orange is to chip away at Proximus and Telenet.

BIPT’s most recent annual report showed that last year convergent bundles of fixed and mobile services accounted for more than half of multiplay subscriptions for the first time. Quad-play in particular is proving popular for service providers because of the dramatic effect it has on churn. According to the regulator, quad-play churn stood at around 3 percent in 2020, compared to 10 percent for triple-play and 17 percent for double-play.

BIPT’s report also noted that revenue in the fixed broadband market reached €3.67 billion at the end of 2020, up 2.9 percent year-on-year, driven by increases in customers and data consumption.

Against this backdrop, there’s little wonder that Orange Belgium is keen to accelerate its convergent strategy.

The telco said on Tuesday that it has very low leverage, and would therefore finance the VOO acquisition by taking on more debt. There is just the small matter now of actually agreeing a deal.

“No further comment can be given on the process at this stage,” Orange said. “Further details of the transaction will be disclosed at the time of signing.”