Vodafone boosts fibre play in southern Europe

Vodafone this week closed the acquisition of private equity-owned Spanish cable operator Ono for which it paid €7.2bn. Ono offers high speed broadband and pay TV services in Spain and Vodafone said that the transaction will accelerate its unified communications strategy “in a highly converged European market”.

Vodafone added that the acquisition will give it a time to market advantage when launching products and services in Spain. The operator group also intends to capitalise on Ono’s distribution and marketing capabilities and aims to cross-sell products and services to each company’s customer base. Vodafone estimates revenue synergies with a total net present value of approximately €1bn.

It added that Ono’s network reach will complement its own FTTH rollout in Spain. According to Vodafone, Ono has Spain’s largest fibre networks, with a reach of 7.2 million homes, or 41 per cent of all Spanish homes. However, its customer base currently stands at just 1.9 million homes and Vodafone highlighted the attraction of Ono’s spare capacity.

At the same time, the company updated its existing agreement with Orange Spain to co-invest in fibre-to-the-home (FTTH) to three million homes and businesses across Spain by September 2015.

The joint deployment has already reached 800,000 premises across 12 Spanish cities, so the companies will jointly deploy fibre to an additional 1.2 million premises in areas where the Ono high-speed fibre network is not present by September 2015; and in addition, Vodafone will provide Orange with wholesale access to one million homes using the Ono network.

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The amended agreement also provides a mechanism for Vodafone and Orange to provide each other with wholesale access to future FTTH deployments across Spain on a reciprocal basis.

In related news Vodafone Portugal and Portugal Telecom have signed a similar agreement to deploy and share fibre networks reaching 900,000 homes in Portugal.

The agreement, which commences in December 2014 and runs for 25 years, will enable each company to offer high-speed data services to an additional 450,000 homes and businesses throughout Portugal.

The access provided by the Portugal Telecom agreement brings significant time to market benefits and will enable Vodafone Portugal to offer high-speed broadband, fixed telephony and television services to almost 2 million homes by the end of 2015.

Vodafone Portugal has over 5.4 million mobile customers and around 240,000 fixed broadband customers, of whom approximately 190,000 are television customers.