Telefonica Germany is reportedly considering sharing its mobile phone network with another local operator – possibly Dutch telco KPN’s E-Plus.
Bloomberg quoted Rachel Empey, CFO of the Spanish telco’s German unit, as saying that “significant…
Telefonica Germany is reportedly considering sharing its mobile phone network with another local operator – possibly Dutch telco KPN’s E-Plus.
Bloomberg quoted Rachel Empey, CFO of the Spanish telco’s German unit, as saying that “significant analysis” has shown sharing network infrastructure with E-Plus could create “[q]uite a lot” of synergies. The comments were made on a conference call with investors.
According to the report, Telefonica Germany, which operates under the O2 brand, noted that it is in talks with two of its three rivals and that a deal is unlikely to be reached before early next year.
However, TelecomFinance understands that Telefonica Germany has no firm plans for an infrastructure tie-up with another local operator at present, its primary focus being on preparing for its upcoming IPO. The listing on the Frankfurt Stock Exchange is set to take place on 30 October.
Commenting on the matter, an E-Plus spokesperson said the company is “generally open to ideas for cooperation”, adding that it closely examines all perceived opportunities.
On 1 June, KPN had announced it was considering “strategic options” for E-Plus but, later that month, it said that sales talks had been terminated because of “adverse conditions in financial markets”. It had been widely speculated that KPN had been in talks with Telefonica.
In July, KPN reportedly mandated UBS to sell about 18,000 E-Plus towers, valued at €300m to €400m, and a news agency report earlier this month stated it had received first-round bids from private equity firms and other parties. According to the report, final bidding was set to take place before the end of the month.
While KPN has repeatedly stated its belief in further consolidation in the German market, the company has never officially confirmed it is seeking to sell the E-Plus towers.
Narrows price range for IPO
Meanwhile, Telefonica has slightly narrowed the price range for the German unit’s IPO to €5.50 to €6.00 per share.
When first announcing details of the planned listing of up to 23.17% of its share capital on 16 October, Telefonica had said shares would be sold at €5.25 to €6.50 each, valuing the offering at €1.36bn (US$1.7bn) and €1.69bn (US$2.11bn). The IPO offer period began on 17 October and is set to run until 29 October. Shares are expected to be listed the following day.
