Two of Ireland’s biggest phone and internet players want to get together

Peter Bodkin

Two of the major players in the Irish internet and telecoms scene are in talks about tying up parts of their business – although they have hosed down speculation they were looking at an outright merger.

Vodafone this morning put out a statement in response to “recent media speculation” it was trying to cut a deal with US-listed rival Liberty Global, which owns brands like UPC and Virgin Media.

Vodafone confirms that it is in the early stages of discussions with Liberty Global regarding a possible exchange of selected assets between the two companies,” it said.

However the UK-headquartered firm, which is worth £64.5 billion (€87.7 billion) on the London stock market, denied it was in discussions about combining with Liberty, which is valued at about $47.5 billion (€42.2 billion) in its own right.

The statement came after Bloomberg reported the two telecoms giants were in informal talks about a range of deals that included the possibility of an outright merger.

The news agency said one of the options on the table was combining the two companies’ European businesses, although a stumbling block was what role Liberty boss John Malone would play in the combined firm.

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Only a few weeks ago Malone compared a potential deal to “a big banana in a jar” if Vodafone was prepared to spin off its prized European operations from its work in emerging markets like India and Africa.

The Liberty Global chairman, the biggest private landowner in the US, has recently been snapping up commercial properties across Ireland including five luxury hotels.

Consolidation time

Telecoms companies across Europe have been busy consolidating to try and turn a profit as providers increasingly turn to bulk packages – combinations of mobile, broadband and TV – to entice customers.

Spanish company Telefónica recently offloaded its O2 businesses in the UK and Ireland to Hong Kong-based Hutchison Whampoa in a deal that lead to its Irish assets being rebranded as Three.

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As it stands, the UK and Ireland are easily the most lucrative territories for Liberty Global, with the company the market leader in fibre broadband across the Republic.

However it has been coming under pressure from Eircom’s fast-growing subscriber base as the former state-owned phone company invests €400 million in its fibre network.

Similarly, Vodafone is the biggest mobile phone provider in Ireland but it has been shedding customers at a steady rate. It has gone into a joint venture with ESB to roll out a €450 million fibre network to compete with Eircom and UPC.

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First published 10.44am

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