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Cityfibre falls as Vodafone re-enters talks with Liberty Global
Shares in CityFibre Infrastructure fell on Monday after the announcement that Vodafone was in talks with cable network owner Liberty Global about possible European asset sales.
Vodafone said on Friday that it was in talks with 'cable cowboy' John Malone's Liberty about potentially buying some of the "overlapping continental European assets" owned by the Virgin Media owner.
The possibility of Vodafone and New York-listed cable giant Liberty merging has been a long-running City topic, with reports late last year that Liberty was exploring a sale of its Swiss and Austrian arms as a way of clearing the way for a merger.
In November, AIM-listed CityFibre, the UK's largest alternative provider of wholesale fibre network infrastructure, announced a long-term strategic partnership with Vodafone to bring gigabit-capable full fibre broadband to up to five million UK premises by 2025.
Under the wholesale agreement, Vodafone will have a period of exclusive rights during the construction phase of each city network to market ultra-fast consumer broadband services on the FTTP network to be built, operated and owned by CityFibre to help fix the UK's relative digital inadequacy. Milton Keynes was announced as the first site for the roll-out of the partnership.
Construction of the first phase of deployment to one million premises was due to start in the first half of 2018, and was expected be largely complete in 2021. Both parties have the right to extend the commercial terms of the agreement to expand coverage to a further four million homes and businesses by 2025.
On Monday, Mike van Dulken, head of research at Accendo Markets, said shares in CityFibre were likely to be faring badly due to worries that any Vodafone-Liberty transaction "harms" the wholesale partnership.
"A VOD-LIB transaction could mean the CITY-VOD partnership suffers, especially if continental assets offer better investment opportunities.
"Milton Keynes may well have just been announced as the first site for the CITY-VOD partnership rollout, but with Liberty Global owning Virgin Media - 1m connections up to 300Mbps, itself trying to connect to 4m UK premises - with which VOD/CITY would be in direct UK competition, might the proposed 12 city roll-out need to be slowed up as a concession?" he wondered.
"Possibly worse news for the smaller partner than the telecom giant, especially if the latter changes its priorities."
Vodafone said on Friday that it was in talks with 'cable cowboy' John Malone's Liberty about potentially buying some of the "overlapping continental European assets" owned by the Virgin Media owner.
The possibility of Vodafone and New York-listed cable giant Liberty merging has been a long-running City topic, with reports late last year that Liberty was exploring a sale of its Swiss and Austrian arms as a way of clearing the way for a merger.
In November, AIM-listed CityFibre, the UK's largest alternative provider of wholesale fibre network infrastructure, announced a long-term strategic partnership with Vodafone to bring gigabit-capable full fibre broadband to up to five million UK premises by 2025.
Under the wholesale agreement, Vodafone will have a period of exclusive rights during the construction phase of each city network to market ultra-fast consumer broadband services on the FTTP network to be built, operated and owned by CityFibre to help fix the UK's relative digital inadequacy. Milton Keynes was announced as the first site for the roll-out of the partnership.
Construction of the first phase of deployment to one million premises was due to start in the first half of 2018, and was expected be largely complete in 2021. Both parties have the right to extend the commercial terms of the agreement to expand coverage to a further four million homes and businesses by 2025.
On Monday, Mike van Dulken, head of research at Accendo Markets, said shares in CityFibre were likely to be faring badly due to worries that any Vodafone-Liberty transaction "harms" the wholesale partnership.
"A VOD-LIB transaction could mean the CITY-VOD partnership suffers, especially if continental assets offer better investment opportunities.
"Milton Keynes may well have just been announced as the first site for the CITY-VOD partnership rollout, but with Liberty Global owning Virgin Media - 1m connections up to 300Mbps, itself trying to connect to 4m UK premises - with which VOD/CITY would be in direct UK competition, might the proposed 12 city roll-out need to be slowed up as a concession?" he wondered.
"Possibly worse news for the smaller partner than the telecom giant, especially if the latter changes its priorities."
Related share prices |
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Vodafone Group (VOD) share price |
CityFibre Infrastructure Holdings (CITY) share price |
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