Vodafone appeases EC regulators by selling cable access to Telefonica

Vodafone Group has entered into a definitive agreement for a cable wholesale agreement in Germany with Telefónica Deutschland, it announced on Tuesday.

The FTSE 100 telecoms giant said the a agreement would allow Telefónica DE to offer high-speed broadband services to consumers on Vodafone and Unitymedia's cable network in Germany, and remained subject to the completion of Vodafone's acquisition of Liberty Global's operations in Germany, the Czech Republic, Hungary and Romania, which itself was conditional on European Commission approval.

Under the terms of the cable wholesale agreement, Telefónica DE would be able to market broadband services over the combined Vodafone and Unitymedia cable network in Germany, which covered 23.7 million households.

Telefónica DE's customers would benefit from access to download speeds of up to 300 Mbps on the combined cable network, superior to the highest available speeds offered by wholesale DSL access, enabling Telefónica DE to deliver competitive broadband and over-the-top television services.

The cable wholesale agreement had been signed on a long-term basis, with Telefónica DE committed to achieving a minimum level of customers over the term of the contract.

Following discussions with the European Commission, Vodafone said it had submitted a remedy package comprising the cable wholesale agreement and a commitment to ensure sufficient capacity is available for over-the-top television distribution, the board of Vodafone said in its statement with regard to the Liberty Global purchase.

In combination, the cable wholesale agreement and over-the-top commitment would enhance broadband competition in Germany to the benefit of consumers and broadcasters, the company claimed.

The European Commission now intended to undertake market testing of the remedy package,, which was expected to conclude during May.

Vodafone said it now expected the European Commission to undertake market testing of the remedy package, and to adopt its decision on the transaction by July, with completion occurring later that month.

“Our deal with Liberty Global is transformational in many ways,” said Vodafone Group chief executive officer Nick Read.

“It is a significant step towards a gigabit society, which will enable consumers and businesses to access the world of content and digital services at high speeds.”

Read said it would also creates a “converged national challenger” in four important European countries, bringing innovation and greater choice.

“We are very pleased to announce today our cable wholesale access agreement with Telefonica DE, enabling them to bring faster broadband speeds to their customers and further enhancing infrastructure competition across Germany.”