Vodafone CEO rules in cable buys in Portugal

Portuguese cable operators could be among Vodafone's next acquisition targets as the mobile giant bulks up its fixed-line assets across Europe, and companies owned by Altice have been cited as potential contenders for such a deal.

Vodafone CEO Vittorio Colao

Vodafone CEO, Vittorio Colao

After securing Kabel Deutschland last year, and recently agreeing on a deal to buy Spanish company Ono for €7.2 billion ($10 billion), Vodafone CEO Vittorio Colao has now told Bloomberg that the company would look at smaller cable companies in Portugal if they were for sale.

If not, Colao said Vodafone would continue to build its own fibre network: the company plans to reach 1.5 million households with a fibre-to-the-home (FTTH) network.

Vodafone faces growing competition in Portugal after the country's biggest cable-TV provider, Zon Multimedia, merged with the country's smallest mobile operator, Optimus, to form ZonOptimus. Portugal Telecom is also planning to merge with Brazilian operator Oi to create an international operator with almost $17 billion in revenue.

"In Portugal there are two strong players and we will make sure that the third, Vodafone, makes strong a competitive play," Colao told Bloomberg.

Potential acquisition opportunities for Vodafone could be two companies owned by Altice, the company controlled by Patrick Drahi that is currently battling with Bouygues to win control of Vivendi-owned French operator SFR. Altice owns Cabovisao-Televisao Por Cabo and Oni Communications in Portugal.

As reported by the Guardian, ING Bank analyst Emmanuel Carlier suggested that Altice's Portuguese business could be attractive to Vodafone. He valued the assets at around €600 million, and said they generated 2013 sales of €210 million while Vodafone Portugal generated sales of £941 million.

Vodafone did not respond to requests for comments, and Altice said it had no comment.

Since Vodafone gained $130 billion from the sale of its stake in Verizon Wireless and created its Project Spring network investment programme, the market has constantly tried to second-guess where the operator might strike next. Also on the list of markets to watch is Italy, where Vodafone is currently adopting a do-it-yourself approach to building fixed assets. Swisscom-owned Fastweb and Wind's Infostrada have both been cited as contenders, but it is far from certain that Vodafone would look to buy a fixed operator there from the limited options available.

For more:
- see this Bloomberg article
- see this Guardian article

Related Articles:
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Vodafone confirms Ono acquisition for €7.2B
Vodafone enters post-Verizon era at half its market value
Reports: Orange eyes Jazztel, as Vodafone weighs raising Hellas stake
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