The rumor of Vodafone Group Plc. (VOD – Analyst Report) mulling over the acquisition of Liberty Global Plc. (LBTYA – Analyst Report) was making rounds earlier this week, in the U.K. telecom circle. However, Vodafone has put an end to all speculations by invalidating the Liberty Global merger talks. Management further stated that the company is not considering any acquisition in the U.K. at present.
Vodafone is a major global wireless service provider with a strong foothold in Europe, Africa and Asia (Middle-East, South, and Asia-Pacific regions). On the other hand, Liberty Global is a leading cable MSO (multi service operator) serving 12 European countries, along with Chile, offering triple-play fixed telephony, high-speed broadband (internet) and next-generation video services.
Several industry researchers have opined that Vodafone's keenness in consolidating its footprint in Europe may be a response to BT Group Plc.'s (BT – Snapshot Report) recent decision to make a foray in the U.K.'s wireless market. BT Group, a diversified communications service provider is currently considering the acquisition of either O2 or EE. O2 is a division of Telefonica SA (TEF – Analyst Report) while EE is jointly controlled by Orange SA (ORAN – Analyst Report) and Deutsche Telekom AG.
Notably, Vodafone is presently striving to fortify its fixed-broadband network whereas Liberty Global is eyeing the mobile service arena. Thus, the two entities will complementary to each other post the merger. Vodafone has decided to offer fixed-line broadband (Internet) and TV services to its residential customers in the U.K. from the spring of 2015. The strategy aims at minimizing customer churn rate as an increasing number of the company's subscribers are opting for the bundled services of its competitors.
Vodafone expects introduction of fixed broadband service in the U.K. will help the company maintain its position in the wireless market as well. In Oct 2014, Vodafone became the first wireless carrier in the U.K. to commercially launch LTE-A (Long-Term Evolution Advanced) service. Further, management plans to roll out LTE-A network throughout the U.K. within a year. The company also aims to offer three times faster data transmission speeds on LTE-A compared with the traditional 4G LTE network.
