Unitymedia to Acquire Mobile Stores - Analyst Blog

Unitymedia GmbH, the German subsidiary of  Liberty Global plc. LBTYA is looking to expand its mobile stores in that country. Currently, Germany's third and fourth largest wireless operators, namely, Telefonica S.A. TEF and Royal KPN N.V. are seeking regulatory approval for a merger between their German units. The merged entity will have more than 44 million mobile subscribers surpassing Vodafone Group plc. VOD and Deutsche Telekom AG.

However, the European regulatory authority may ask the Telefonica-Royal KPN combine to divest some of their wireless customers and stores in order to eliminate monopolistic power. Unitymedia is targeting these divested wireless subscribers and stores that will put up for sale.

Currently, the company operates 300 mobile stores in west and southwest Germany where it offers triple-play broadband Internet, telephony and pay-TV bundle. Unitymedia also provides mobile phone services to about 240,000 subscribers using Telefonica Deutschland Holding AG's network.

Last month, Bloomberg reported that Liberty Global intends to establish a pan-European mobile virtual network operator (MVNO) system to provide mobile phone services. MVNO is a company which uses the established network infrastructure of an existing wireless operator to offer its own services. Consequently, the company will become a competitor to major wireless operators, such as Vodafone, Deutsche Telekom, Royal KPN N.V. and Belgacon.

In Jun 2013, Liberty Global acquired a 100% stake in the British cable MSO, Virgin Media, which offers mobile phone services.  In the U.K., the merged entity poses serious competitive threat to British Sky Broadcasting Group plc and BT Group plc. BT. Liberty Global currently carries a Zacks Rank #3 (Hold).