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LONDON, UK / ACCESSWIRE / November 7, 2016 / Active Wall St. blog coverage looks at the headline from telecom major Vodafone Group PLC (NASDAQ: VOD) as the company announced on November 04, 2016, the sale of its fixed line and broadband business "Vodafone Thuis" to Deutsche Telekom subsidiary in the Netherlands. The exact financial terms of the deal were not shared by the companies. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
One of Vodafone's competitors within the Wireless Communications space, Telefonica Brasil S.A. (NYSE: VIV), reported its results for 3Q 2016 on October 25, 2016. AWS will be initiating a research report on Telefonica Brasil in the coming days.
Today, AWS is promoting its blog coverage on VOD; touching on VIV. Get all of our free blog coverage and more by clicking on the link below:
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About the deal
The deal is between Vodafone's subsidiary, Vodafone Libertel B.V., and Deutsche Telekom subsidiary, T-Mobile Netherlands Holding B.V. Vodafone Thuis has over 150,000 fixed broadband users. The deal is expected to close in December 2016 and is subject to approval from the Dutch competition authority and the European Commission.
The deal is seen as a placation of EU regulators monitoring the merger of Vodafone Netherlands and Liberty Global's Dutch cable company subsidiary Ziggo.
According to the annual report for 2015, T-Mobile Netherlands Holding B.V. is a subsidiary of Deutsche Telekom is based in Hague and had around 1400 employees.
Commenting on the acquisition, Martin Knauer, acting CEO of T-Mobile Netherlands said:
"Thanks to the extensive knowledge and experience of the Deutsche Telekom group, we will continue to innovate these newly-acquired businesses in the consumer market and offer more choice to the Dutch consumer."
Background
In February 2016, Liberty Global Europe Holding B.V. and Vodafone International Holdings B.V had announced the merger of their operations in Netherlands and form a 50:50 joint venture. Under the joint venture Vodafone's mobile business would be merged with Liberty Global's Ziggo brand which is in the broadband and TV business. The JV would operate under both the brand names, i.e. Vodafone and Ziggo, and become Netherlands leading integrated communication's provider with over 15 million customers.
Vodafone offered mobile communications service, retail fixed line telephony, broadband internet and TV services in the Netherlands using its own network and infrastructure. Liberty Global, through its brand Ziggo, operated a cable network and services like fixed telephony, broadband internet and TV services over cable as well as mobile services as a mobile virtual network operator.
The European Commission had reservations on the merger and was concerned that it would reduce competition for fixed multiple play services and for fixed-mobile multiple play services in the Netherlands. This would have been detrimental to the interests of the consumers. The merger would likely to have increased prices in the face of reduced competition.
In August 2016, The European Commission cleared the merger on the condition that Vodafone would divest its fixed line business in the Netherlands. This would eliminate the overlap of services and consumers for Vodafone and Liberty Global in the Netherlands, thus addressing the competition concerns.
Vodafone is being cautious given that recently (on October 28, 2016), Britain's regulators imposed a fine of £4.6 million for "serious and sustained" customer billings failures and did not act quickly enough to identify or address the problems. Approximately 10, 452 pay-as-you-go customers of Vodafone UK had together lost around £150,000 pounds between end of 2013 and April 2015, when Vodafone had shifted to a new billing system. Vodafone had later refunded the affected customers and addressed the problem in the billing system. But by then it had to face a lot of flak from customers as well as consumer groups.
With the easing of international sanctions on Iran, on October 18, 2016, Vodafone made its foray into Iran's telecom market by partnering with Iranian internet-service provider HiWeb.
A couple of days before the Iranian deal, on October 16, 2016, Vodafone Egypt had applied for 4G license from Egypt's telecom regulator.
Stock Performance
At the close of trading session on November 04, 2016, Vodafone's stock price slightly fell 0.84% to end the day at $27.12. A total volume of 6.97 million shares were exchanged during the session, which was above the 3-month average volume of 4.57 million shares. The stock currently has a market cap of $72.83 billion and has a dividend yield of 5.72%.
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