Vodafone splashes billions on European expansion

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The Vodafone-Liberty Global deal comes during a flurry of activity in the telecoms and media industry.

Vodafone's Germany CEO Hannes Ametsreiter said: "With the merger we are for the first time creating genuine competition, because we are creating a second, strong infrastructure competitor".

"We are committed to accelerating and deepening investment in next generation mobile and fixed networks, building on Vodafone's track record of ensuring that customers benefit from the choice of a strong and sustainable challenger to dominant incumbent operators", Colao added.

In the Czech Republic, Hungary and Romania, Vodafone says the combined business will reach close to 40 percent of households, 15.8 million mobile, 1.8 million broadband, and 2.1 million television customers.

Quite a lot actually.

The Transaction will be subject to review by and approval from the European Commission.

Deutsche Telekom's chief executive, Timotheus Höttges, said in February that the deal was "completely unacceptable".

Vodafone offers only mobile services in Hungary, Romania and the Czech Republic, but buying Liberty's cable business will allow to expand into TV and broadband in those markets.

If Vodafone prevails, which is most likely, what is the prize?

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However it expects to strip out roughly €535m in costs each year within five years after completion, with an estimated net present value of more than €6bn after integration costs.

The deal puts Vodafone back on the front foot in its European heartlands, where it is battling to be one of the few players with the scale to provide the full range of entertainment and communications services that consumers want. Further savings will also be gained in Germany from the migration of Vodafone's existing overlapping fixed-line DSL customer base to the Unitymedia cable network.

What will the European punters make of it?

"Ultimately they will be confronted by a massive shift in their negotiating position", said Hans Demmel, the head of the VPRT broadcasters' group who also runs all-news channel n-tv.

Here, Vodafone hopes to become a "converged national challenger", with the aim of providing gigabit connections to 25 million German homes by 2022.

"For TV, these include satellite (which accounts for the largest proportion of the TV segment of the German market), cable and broadband internet streaming/download offerings", read a Vodafone statement.

As a result of the agreement and the sale of its Austrian cable division to Deutsche Telekom late past year, Liberty Global will now focus more on the United Kingdom and Ireland, its largest market.

The deal doesn't take Liberty Global out of Europe-it's still hanging around in the U.K., Ireland, Belgium, the Netherlands, Switzerland, Poland and Slovakia, and it will still be Europe's biggest cable provider-but it does take a lot of Europe out of Liberty Global.