Liberty Global's Unitymedia eyes expansion in B2B, mobile

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[March 12, 2015]  By Julia Fioretti

BRUSSELS (Reuters) - Liberty Global's German unit has set its sights on business-to-business (B2B) broadband and mobile as part of its strategy to keep expanding in Europe's biggest cable market, ramping up the pressure on established telecom players.

Unitymedia KabelBW and Kabel Deutschland - now owned by Vodafone - have been snatching customers from the incumbent Deutsche Telekom with their upgraded networks offering broadband for homes and businesses at speeds that are often five times faster.

Unitymedia already rents mobile capacity from Telefonica Deutschland but is looking to expand its role as a mobile virtual network operator (MVNO) by increasingly offering so-called "quad play" packages combining fixed telephony, TV, broadband and mobile.
 


However, Lutz Schueler, Unitymedia's CEO, said in an interview with Reuters that he would not be rushed into offering mobile services by Telefonica Deutschland's takeover of KPN's E-Plus, creating Germany's biggest mobile carrier by customers.

"We...in cable believe in consolidation so it's easy to understand that also our competition is interested in scale and consolidation," Schueler said. "Do we think that is impacting our future in a negative way? No. Are we also committed to mobile? Yes."

The cable operator had 309,800 mobile customers at the end of December 2014, which compared to 4.395 million subscribers in Western Europe for Liberty Global, with 3 million in the UK. Germany is Liberty's third biggest mobile market after the UK and Belgium.

"We have just entered the B2B segment, that is also a growth potential and of course mobile is a growth potential for us," Schueler said. "In the right timing we will put more effort into it."

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The B2B market is seen by many cable companies as a lucrative opportunity in fixed broadband and a further way to compete with traditional telcos.

Liberty Global has been on a shopping spree across Europe over the past decade, buying up national cable operators and recently targeting TV assets.

At the same time mobile operators like Vodafone have been buying into cable to get a foothold in the fixed broadband business, highlighting the convergence between mobile and fixed line services.

Liberty's CEO Mike Fries told a cable summit in Brussels on Wednesday that he was committed to increasing the company's offerings of quad play packages including mobile.

"First we get the growth from fixed broadband, B2B, then also from mobile. We are not desperate to do everything at the same time," Schueler said.

(Reporting by Julia Fioretti; Editing by Vincent Baby)

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