T-Mobile Austria buys UPC in €1.9bn deal

By:
James Pearce
Published on:

Deutsche Telekom has struck a deal to buy Liberty Global's Austrian cable unit UPC in order to turn T-Mobile Austria into a converged quad-play provider

Deutsche Telekom has struck a €1.9 billion deal to buy Austrian cable provider UPC from Liberty Global, which will be merged with T-Mobile Austria to form a quad play provider.

The combined company will offer converged mobile, fixed line, broadband and TV services, as well as the internet of things, acting as a challenger to incumbent A1 Telekom Austria, Deutsche Telekom said.

“With this acquisition Deutsche Telekom is taking another major step to realize our strategy to become a fully converged operator in our European footprint. The acquired cable network will be a perfect match with our best mobile network. It will allow customers to benefit from extended scope of services with fixed and mobile offerings from one source. We see a significant potential to accelerate growth in the Austrian market,” said Srini Gopalan, board member Deutsche Telekom for Europe.

The enlarged company will have approximately 6.7 million “Revenue Generating Units”. UPC is the largest cable operator in Austria, covering around 36% of households, and is number two in the broadband market. 

The combined revenue of both companies in 2017 is expected at €1.2 billion, according to Deutsche Telekom, with synergy potential of up to €800 million after integration costs.

Together with the dense urban fibre infrastructure of UPC Austria, the fibre core network owned and operated by T-Mobile Austria will form a strong backbone for high speed mobile broadband access and for next generation network 5G, Deutsche Telekom added.