Vodafone Pays $10 Billion to Buy Spanish Cable Network
Published on: 17th Mar 2014
By: Ian Mansfield
Vodafone has announced that it is buying the Spanish cable operator Ono for a total consideration equivalent to EUR7.2 billion (USD10 billion) on a debt and cash free basis.
The deal had been expected for some time, and the main sticking point appeared to be the price.
Ono's network covers 7.2 million homes across the country and offers services to 1.9 million customers.
Vodafone's fibre-to-the-home ("FTTH") build programme will be refocused
towards areas where Ono has limited or no network presence. Vodafone intends to
complete its FTTH rollout to 1.5 million homes passed, providing it with access
NGN network covering up to 10 million homes released to marketing, equivalent to 57% of total Spanish homes.
In the long term, Vodafone expects to achieve cost and capex synergies with a run-rate of approximately €240 million before integration costs by the fourth year after it buys the company.
The savings will be primarily derived from utilising Ono's network for mobile backhaul, limiting Vodafone's FTTH build plan to the initial 1.5 million homes passed, the rationalisation of overlapping activities and the migration of Ono's mobile traffic to Vodafone's network.
Ono's mobile customers are currently connected via an MVNO to the Telefonica network.
That should take Vodafone's Spanish mobile customer base to 15.5 million, as compared to an adjusted base of 17.5 million for Telefonica.
Vodafone Group Chief Executive Vittorio Colao said: "The combination of Vodafone and Ono creates a leading integrated communications provider in Spain and represents an attractive value creation opportunity for Vodafone. Demand for unified communications products and services has increased significantly over the last few years in Spain, and this transaction -- together with our fibre-to-the-home build programme -- will accelerate our ability to offer best-in-class propositions in the Spanish market."