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Vodafone IS talking to Virgin Media daddy Liberty Global

Plus: If Brexit happened we'd stay put, confirms CEO

By Simon Rockman

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Rumours of all kinds of talks between Liberty Global, which owns Virgin Media in the UK and Vodafone, have been rumbling for months. Vodafone's now come out and confirmed those rumours are true.

Vodafone put out a release this morning saying:

Vodafone Group Plc ("Vodafone") notes the recent media speculation regarding a potential transaction between Vodafone and Liberty Global Plc ("Liberty Global").

Vodafone confirms that it is in the early stages of discussions with Liberty Global regarding a possible exchange of selected assets between the two companies.

There is no certainty that any transaction will be agreed, nor is there certainty with respect to which assets will ultimately be involved.

Vodafone is not in discussions with Liberty Global concerning a combination of the two companies.

This creates more questions than it answers. The main one is “who is buying and who is selling”. Analyst Paolo Pescatore from CCS Insight follows both Vodafone and Liberty Global closely and thinks that Vodafone should be talking to Sky instead, which he described to The Register as “a good strategic fit”.

While Liberty Global might be wondering what to do with the virtual network Virgin Mobile now that its host EE is being bought by BT, Pescatore doesn’t think Virgin Media’s four million television subscribers are that valuable to Vodafone. He points out that Virgin Media has been struggling to acquire customers and doesn’t have the exclusive content which Sky does.

The launch of Vodafone’s broadband service is imminent, but while one Reg reader has emailed us to say that Vodafone customer services told him that it would launch on 20th July with prices announced on the 5th. We were unable to verify this.

Liberty Global recently acquired Time Warner’s cable business in the US. Pescatore believes that any exchange of assets is likely to happen in Europe, and that might include the sale of Vodafone’s mobile business in the UK. He argues that consolidation has made Vodafone the number three player in the market and its plans to move into multiplay would require significant acquisition, saying that Vodafone would not be able to grow the base organically.

A sale of Vodafone’s UK business would not necessarily mean a relocation of the headquarters. Vodafone CEO Vittorio Colao told The Register that the company was loyal to Newbury and that while he believes that being in Europe is the best thing for the firm, its customers and shareholders, if Britain did leave the European Union it would not seek to re-locate the HQ. ®

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