Vodafone in discussions with Altice about acquiring Cabovisao

Vodafone is in discussions with Altice about buying Portuguese cable business Cabovisao, which the French telecoms group has this week agreed to sell under conditions of its takeover of Portugal Telecom.

The European Commission on Monday cleared Altice's acquisition, although it said the decision was conditional on the sale of the Altice's Portuguese businesses Oni and Cabovisao.

The commission had been concerned that the merged entity would have reduced competition in the market for fixed telecommunications.

Cabovisao provides pay television, fixed internet access and fixed telephony services for consumers, while Oni provides similar services to business customers. Vodafone's interest is mainly in acquiring Cabovisao, according to those familiar with the talks.

Several other parties, including strategic and financial bidders, have also expressed interest in acquiring both or one of the companies, said a person familiar with the situation. The sale process is expected to last through the summer.

Vodafone has made little secret of its desire to add fixed-line services to bolster its mobile business, with the acquisition of Cabovisao seen by analysts as a useful boost to its already significant Portuguese fixed-line operations. The company has already made similar acquisitions of fixed-line business to bolster its mobile operations in Germany, Spain and the UK.

Altice declined to comment but added that closing the Portugal Telecom deal was not conditional on the sale.

Vodafone also declined to comment.

Nos, the Portuguese telecoms company, could also be interested in buying the Altice businesses although analysts have warned that it would face significant regulatory obstacles given the company already has a significant share of the market.

Analysts at Espirito Santo, the Portuguese investment bank, said Vodafone was the most likely buyer of Cabovisao and Oni.

"We see more of a possibility that Altice may try to sell to Vodafone," the bank said in a note on Tuesday. "In theory such a deal would allow Vodafone to strengthen its scale in the fixed segment in Portugal, allowing it to cover 2m households with fibre/cable and increase its market share from roughly 10 per cent to 16 per cent."

Cabovisao generated earnings before interest, tax, depreciation and amortisation of close to €40m last year on revenues nearing €100m, although both fell in 2014 owing to intense price competition from Vodafone and Nos.

An acquisition of Cabovisao by Vodafone would also mean that the British group would not "need to be so aggressive in pricing in order to increase its scale/share of the market", Espirito added.

Vodafone announced on Tuesday that it has agreed to team up with African rival MTN to combine mobile banking services in parts of the sub-Saharan region. Customers of Vodafone's M-Pesa and MTN's Mobile Money will be able to make low-cost transfers across either service in seven African countries.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation