Vodafone in talks to buy German cable firm

UK mobile telco is reportedly in talks to acquire Kabel Deutschland as fixed and mobile telecommunications merge.

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Vodafone is in discussions to acquire German cable operator company Kabel Deutschland
Vodafone is in discussions to acquire German cable operator company Kabel Deutschland

UK mobile telecommunications giant Vodafone is in discussions to acquire German cable operator company Kabel Deutschland, according to a report by The Financial Times.

The acquisition would allow Vodafone to offer converged fixed and mobile services – including mobile voice and data, broadband and cable TV – to German customers.

It would continue the recent consolidation of the telecommunications sector in Europe. Last week, US-owned cable company Liberty Global announced its intention to acquire Virgin Media for £15 billion.

Last year, Vodafone – which mainly operates mobile networks – acquired Cable&Wireless Global for £1 billion. The acquisition netted Vodafone 400,000 km of fibre optic cabling around the world.

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The consolidation occurs at a time when consumers are changing the way they buy network services. Last year, telecommunications watchdog found Ofcom found that mobile voice calls had fallen for the first time ever in 2011.

The industry's revenue from both mobile and fixed-line voice services fell 5% £8.9 billion. The growth in mobile data (5%) and fixed-line broadband (7%) failed to compensate for the decline, and overall telecoms revenue fell by 2% to £39.7 billion.

Add to that the growing use of online streaming video services and the potential disruption from 4G mobile broadband, and it is clear that the established business model for telecommunications companies is under threat – as ever.