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Voda Arcor sale off - report

Mobile's love affair with fixed line continues

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Vodafone could be on the verge of signalling an about-turn in strategy amid reports that it plans to hang on to its fixed line phone business in Germany.

The Times reports that Voda boss Arun Sarin is preparing to scrap the €1bn sale of Arcor as the giant cellco looks to embrace fixed line and broadband services.

Voda's majority stake in Arcor - one of Germany's leading alternative carriers to incumbent Deutsche Telekom - was acquired as part of its buyout of Mannesman in 2000.

It was always thought that Voda would ditch its stake in the business to concentrate on mobile. But the topsy-turvy world of telecoms means cellcos are buying up fixed line operations, fixed line telcos are moving into TV, and broadcasters are entering the telecoms market.

And now that mobile operators are looking to provide converged services, Voda is eyeing Arcor as a foothold in the fixed line sector. Not only would it open up opportunities for growth in Germany, it would also prove to be an important test bed for any expansion in the UK.

No decision has been made to date, according to the paper, although the firm is due to publish a review of its business shortly.

Earlier this year it emerged that Vodafone was looking to branch out into the fixed line world to offer voice and broadband products alongside its own mobile services.

Although the giant cellco has also been linked with Bulldog and Tiscali, Vodafone boss Arun Sarin suggested in a newspaper interview that the telco would most likely opt to resell wholesale voice and broadband services rather than buy a service provider.

Sarin said: "The question is, as the world evolves with services like VoIP and Wi-Fi and all that, should we expand the services our company provides? I am not sure why one would want to buy a fixed-line asset when one can resell broadband DSL and other bits we may want to bundle."

And Voda isn't the only cellco interested in fixed line services. O2 recently confirmed that it was also looking at offering multiple telecoms services amid reports that it too was sniffing around Bulldog - the LLU operator owned by Cable & Wireless (C&W) - and Tiscali UK.

While in just over a week, Wanadoo is to rebrand to its sibling colour of Orange to create a giant France Telecom owned telco in the UK offering fixed, mobile and broadband services. ®

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