Financial Times FT.com

Vodafone eyes deals in Italy and Spain

By Andrew Parker

Published: September 6 2007 09:13 | Last updated: September 6 2007 09:13

Vodafone is considering buying telecoms infrastructure in Italy and Spain to allow it to supply fixed-line broadband to its mobile phone customers.

The UK group, the world’s largest mobile operator by revenue, is mulling an offer for fixed-line networks in Italy and Spain owned by Tele2, a Swedish telecoms company.

Vodafone declined to comment on Thursday while Tele2 could not be reached immediately.

The UK group is moving beyond its mobile-centric past by selling fixed-line broadband in its core European markets of Germany, Italy, Spain and the UK. The strategy is designed to boost the loyalty of Vodafone’s mobile customers.

Arun Sarin, chief executive, said in May last year that the group would take an “asset light” approach to selling fixed-line broadband.

In the UK, Vodafone is reselling wholesale broadband products provided by BT, the former fixed-line monopoly.

But in Germany, Vodafone is using the infrastructure of Arcor, its fixed-line phone company, to deliver broadband.

Last year Vodafone announced a deal with Fastweb, an Italian telecoms company., that would allow Vodafone customers to get fixed-line broadband via Fastweb’s network.

It is unclear whether Vodafone would continue its alliance with Fastweb if it bought Tele2’s Italian fixed line assets.

Vodafone made an offer earlier this year to buy Ya.com, a Spanish fixed-line broadband company owned by Deutsche Telekom, but the German operator agreed to sell Ya.com to France Telecom. Deutsche Telekom also agreed to buy France Telecom’s Dutch mobile business.

People familiar with Vodafone said higher broadband pricing in continental Europe, compared with the UK, could justify purchases of fixed-line infrastructure.

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