Vodafone in £6bn Spanish cable deal

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File photo dated 02/09/13 of a Vodafone shop and logo. The mobile phone giant has stepped up its expansion in Europe today by unveiling a ?6 billion deal to buy Spanish cable operator Ono. PRESS ASSOCIATION Photo. Issue date: Monday March 17, 2014. The acquisition of Ono, which offers high-speed broadband and pay-TV to 1.9 million customers in 13 regions of Spain, builds on Vodafone's purchase of Kabel Deutschland for around ?6.5 billion last summer. See PA story CITY Vodafone. Photo credit should read: Rui Vieira/PA Wire

Mobile phone giant Vodafone stepped up its expansion in Europe today by unveiling a £6 billion deal to buy Spanish cable operator Ono.

The acquisition of Ono, which offers high-speed broadband and pay-TV to 1.9 million customers in 13 regions of Spain, builds on Vodafone's purchase of Kabel Deutschland for around £6.5 billion last summer.

Vodafone's latest swoop comes as it looks to spend some of the proceeds of its 130 billion US dollar (£78 billion) sale of its stake in US mobile phone operator Verizon Wireless.

Vodafone is growing strongly in emerging markets such as India, but its European business has been weighed down by economic conditions, competition, and regulator-imposed price changes.

And the sector's focus has been shifting towards ''quad play'', which involves providing bundles of phone, broadband, mobile and pay-TV services.

Vodafone chief executive Vittorio Colao said: "Demand for unified communications products and services has increased significantly over the last few years in Spain, and this transaction will accelerate our ability to offer best-in-class propositions in the Spanish market."

Ono has a current reach of 7.2 million homes - about 41% of all homes in Spain - providing its customers with broadband speeds in excess of 200 Mbps and a pay-TV service through TiVo.

Its network will complement Vodafone's fibre-to-the-home build programme, which will be refocused towards areas where Ono has limited or no network.

Vodafone shares were more than 1% higher following today's agreement.

ETX Capital market strategist Ishaq Siddiqi said: "Vodafone's southern European businesses were struggling at the tail end of 2012 and most of 2013 so this deal should help the group's operations in that area.

"Growing confidence in the Spanish market, with better economic fundamentals as the country moves out of crisis and on a path to growth, raises the investment outlook for Vodafone's Spanish business."

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