Published:
19-May-08
Mobile operator Vodafone has acquired the remaining 24.6 per cent stake in alternative DSL provider Arcor in Germany that it did not already hold, from Deutsche Bahn and Deutsche Bank. The €474m cash deal is expected to close immediately.
Our take...
Assuming 100% stake in Arcor will give Vodafone full control in marketing its fixed line DSL and VoIP services under the "Vodafone DSL" brand – currently the company resells DSL in partnership with Arcor. Vodafone also provides broadband over its mobile network to laptops/PCs with connected laptop cards/USB modems under the "Vodafone Zuhause" brand. Given Vodafone's commitment to becoming an all-in-one communications provider, the deal could see Vodafone looking to bundle fixed DSL/VoIP and mobile broadband/voice services. Indeed, competitor O2 Germany is already selling integrated packages of mobile, fixed voice and fixed internet services in the market. However, Screen Digest believes there are some hindrances to takeup of bundled mobile voice/fixed broadband packages, given that mobile voice plans are usually tailored on an individual basis whereas fixed broadband is usually decided on a household basis.
Vodafone will be the largest alternative DSL network operator in the market in terms of network connections (2.6m currently), leading rival unbundlers including Telecom Italia (2.4m, owns Hansenet, operates Alice brand), Telefonica (O2 Germany), Versatel (owned by Apax partners) and Net Cologne. By comparison, incumbent telco Deutsche Telekom claimed nearly 13m DSL network connections at end March 2008, according to Screen Digest research.
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