Vodafone abandons Greek merger talks


Vodafone has abandoned plans to merge its operations in Greece with Wind Hellas, throwing into doubt consolidation elsewhere in Europe. In August, Vodafone announced that it was exploring a potential deal with Wind in a move that would have reduced the overall market from three players to two.

Vodafone Chief Executive Vittorio Colao had warned that Vodafone needed to change the dynamic in Greece if it were to continue to invest in the country, but Monday's announcement will prove more serious for Wind (Athens, Greece) in the short term.

Wind, the third-biggest Greek telecoms operator, needed a deal to better compete in the market that has been hit by extreme pressures on consumer spending.

Both businesses were struggling against cell phone market leader Cosmote (Athens, Greece), a unit of former state monopoly OTE, and analysts and investors had watched the situation closely to gauge the mood of regulators in the face of such tough trading. OTE is controlled by Deutsche Telekom (Bonn, Germany).

Vodafone announced a writedown on the business in November for $711 million, following an earlier writedown of $1.2 billion. Market leader OTE said in November that it would support the planned merger, and that it expected the regulator to agree.

Vodafone made a short announcement on Monday without giving a reason for the decision, although the two groups had decided that they would struggle to get the deal past European regulators, a source familiar with the situation said.

Mobile operators have struggled in recent years in mature European markets, where increasing competition and pressures on consumer spending have pushed down on tariffs at a time when investment is needed in networks to support data-hungry devices, such as smartphones.

In Britain, Deutsche Telekom and France Telecom (Paris) merged their operations to form the joint venture Everything Everywhere, taking the market from five to four operators, and further consolidation was announced in Austria last week.

Analysts have also speculated that Telefonica's (Madrid) O2 would merge its German operations with KPN's (The Hague, Netherlands) E-Plus, while Spain also appears ripe for a deal.

Analysts said a Vodafone deal with Wind was always a long shot and that the decision to walk away indicated that regulators simply would not accept a market with only two players, however tough the conditions.

Will Draper of Espirito Santo Financial Group said that did not mean that consolidation could not take place in markets such as Germany and Spain however, as long as three operators remained.

"To go to two players each with 50% market share just breaks all the rules," he said. "I think it was very speculative, given the trauma that the Greek market and Wind in particular were going through."

An attempt in 2010 to take the Swiss market to two players from three also failed when competition regulators ruled that that would be bad for consumers.

The announcement however is still likely to come as a surprise to investors and analysts as Vodafone had looked close to announcing some kind of a deal as recently as last week.

 (Reporting by Kate Holton; Editing by Louise Heavens)


Featured Reports

Content Delivery Networks (CDN) 2015
Content Delivery Networks (CDN) represent large distributed system of servers deployed in multiple data centers across the Internet. CDNs provide solutions for efficiently and effectively managing content of all types. Solutions include core services such as aggregation, management, and distribution of content as well as a variety of value-added functionality.


Cable Carrier Wi-Fi: MSO Take MNO Market Share
How does a cable provider gain a bigger piece of the telecom market pie chart? With a clever Wi-Fi strategy, cable providers are in a unique position to dominate the residential and business telecommunications markets. This is the portent of things to come in the very near future: an MSO as MNO play.


Structured and Unstructured (Big) Data in Telecom Analytics
This report provides the reader with a broad understanding of telecom data (structured and unstructured/big data) and related analytics. The report identifies market drivers and opportunities as well as forecasts for certain key growth areas such as deep packet inspection.


Affordable Market Reports on Big Data, IoT, CDN & More!
Access the exclusive new series of market research reports brought to you through the partnership of Mind Commerce research and TelecomEngine.com.
Browse the latest titles



Featured Events & Partners

GEN 15
Nov. 16-19, 2015

Omni Hotel, Dallas, Texas

The global gathering of networking professionals enabling the future of agile, assured and orchestrated services powered by CE 2.0, LSO (Lifecycle Service Orchestration), SDN and NFV.

Visit event website...