Vodafone Group Plc, having accumulated cable assets in the U.K., Germany and Spain, is open to making an acquisition in Portugal, Chief Executive Officer Vittorio Colao said today.
“If smaller cable companies were available for sale we would look at them,” Colao, 52, said in an interview after attending an event in Lisbon. “If they are not available for sale, we’ll build fiber in their areas and then we will see.”
The world’s second-largest mobile-phone company is focused on investing in markets where it operates, and investing in new countries is a second priority, he said. Vodafone this month agreed to buy Grupo Corporativo Ono SA for 7.2 billion euros ($10 billion) including debt. The purchase gives Newbury, England-based Vodafone 1.9 million customers in Spain, complementing its mobile service and helping it challenge Telefonica SA and Orange SA.
Vodafone agreed to pay 10.5 billion euros last year to acquire Germany’s Kabel Deutschland Holding AG. Europe’s communications market is consolidating as Vodafone and rivals such as billionaire John Malone’s Liberty Global Plc compete for assets. Liberty agreed to take full control of Dutch broadband provider Ziggo NV for $6.7 billion in January.
Vodafone shares rose 0.2 percent to 223.15 pence in London trading today. Standard & Poor’s cut Vodafone’s outlook to negative from stable today, while keeping its rating at A-, the fourth-lowest investment grade.
Portugal’s biggest cable-TV provider, Zon Multimedia, last year merged with the country’s smallest mobile-phone operator, Optimus, to compete against Portugal Telecom SGPS SA and Vodafone for cable-TV, Internet and telephone clients. Portugal Telecom in October agreed to combine with Brazil’s Oi SA to create a trans-Atlantic carrier with almost $17 billion in revenue.
“In Portugal there are two strong players and we will make sure that the third, Vodafone, makes strong a competitive play,” Colao said.
Altice SA, the cable holding company controlled by Patrick Drahi, owns operators Cabovisao-Televisao Por Cabo SA and Oni Communications in Portugal.
Vodafone is also building its own Portuguese fiber network. The company is planning to connect 1.5 million households with high-speed fiber Internet service, Colao said. Revenue in Portugal and other countries in southern Europe fell last year. Sales from the Portugal unit declined to 941 million pounds ($1.6 billion) in the year ending in March 2013 from 1.07 billion pounds a year earlier.
Vodafone’s plans are part of a wider program called Project Spring. Using some of the proceeds from its record-breaking sale of its stake in U.S. mobile company Verizon Wireless, Vodafone has pledged to spend 19 billion pounds on its network in the next two years, adding Internet, TV and high-speed mobile services globally.
The carrier is working to transform itself into a data hub for customers who will be able to access content and services across multiple networks.
From Lisbon, Colao will travel to Egypt and South Africa next week, he said. Vodafone’s African units have worked to roll out mobile-payment systems that provide a secure way to transfer and store money on mobile phones for customers without bank accounts.
“The greater opportunities are in mobile data, which is the main way to bring economic opportunity and also wealth to emerging markets -- payments, money transfers,” Colao said. “Clearly the other African countries will have to get these money transfer solutions which are very safe, very good for the poorer part of the population and enable commerce.”