Vodafone and O2 go head-to-head to acquire German broadband operator

In an effort to shift their reliance on mobile voice revenues, Vodafone and O2 are both actively considering making a bid for the German Internet provider HanseNet. The German ISP, which has more than 2.3 million customers, has been put up for sale by its owner, Telecom Italia, which is struggling to reduce its debt and wants to withdraw from international markets.

Market analysts believe the deal would make sense for either company, giving Vodafone the opportunity to compete more effectively against Deutsche Telekom and also reduce Opex cost, while for O2 the deal would transform its standing in the German broadband market and allow it to become a real contender.

However, the bids--which need to be submitted before the end of the month--might fall well short, given the current funding climate, of the €1 billion that some market watchers believe HanseNet is wanting as a minimum price. The head of Vodafone Germany recently commented that consolidation was overdue in the German broadband market, and would only look at acquisition opportunities if the pricing made sense.

Indications that building the necessary funding for such a purchase might be troublesome came from Turkcell which had been considering an offer for HanseNet. However, the company has now declined to bid.

For more on this story:
The Telegraph

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