Vodafone sells Dutch broadband operations to T-Mobile

 
Grace Rahman
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Shoppers walk past a Vodafone store in L
Vodafone is selling Dutch business to make way for its Ziggo merger (Source: Getty)

Shares in Vodafone dipped this morning after the firm announced its Dutch arm had sold its fixed-line operations to T-Mobile Netherlands for an undisclosed sum in an effort to get EU competition authorities onside.

The deal means 150,000 customers’ fixed-line broadband will now be handled by T-Mobile’s Dutch subsidiary.

Merger master plan

The sale is under condition of approval from the Dutch competition authority and the European Commission but is expected to be finalised by December.

This is all part of Vodafone Netherlands’ attempt to charm the European regulator into okaying its huge merger deal with US cable operator Liberty Global.

The plan is to create a merger of equals between Vodafone and Liberty's subsidiary Ziggo, the Netherlands’ largest cable company. Vodafone, meanwhile, is its biggest mobile provider. Their combined efforts are expected to be a significant competitor to ex-state telecommunications company, KPN.

Vodafone shares were down 1.1 per cent at 215p in early trading after today’s news.

After integration costs, the proposed merger should be worth €3.5bn. It’ll cost Vodafone a whopping €1bn (£770m) to equalise membership in the joint venture.

After the deal was announced in May, Vodafone said the merger will create a “strong and competitive integrated communications player, which will invest in digital infrastructure, entertainment services and productivity applications for Dutch consumer, business and public sector customers”.

Vodafone seems to be doing all it can to please the regulator, after last year’s attempt at a much bigger merger failed.

Vodafone’s UK arm has just been slapped with a £4.6m fine from telecommunications regulator Ofcom, after "serious and sustained breaches of consumer protection rules" were discovered over two investigations.

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