沃达丰欲77亿欧元收购德国Kabel

-Mobile is extremely vulnerable, particularly if you don’t have access to your own fixed lines. And this will give them enough fixed lines to carry about 40% of the traffic they’re doing in Germany,

-So if they get it right, they’ll be doing mobile phones, land line phones, broadband and TV.

-The quadruple plan, what the players in the market have found is that the churn factor, or the customers’ moving to other providers can be cut by as much as 60% if you move from one product to four products, and that’s what it’s all about, mobile penetration, phone penetration is well over 100% in developed economies, it’s all about slowing that churn to preserve your revenues and cash flow.

-Is that because consumers they are well, I may have the nerve and appetite to change my phone provider, but can I really take the risk and change everything all at once?

-Yes, that’s absolutely right and that’s precisely why mobile is so vulnerable. Because all of us, we change our mobile phone far more often than we change our fixed line. It doesn't require anyone to drill a hole in the wall, or put up a satellite dish up on our roof, all those, we just go to the shop and I could just meet someone who’s offering me an alternative package, so Vodfone without this type of deal and similar deals that it’s done in the UK and New Zealand is extremely vulnerable.

-Right, so we can see what Voda gets out of it, what about German consumers, Germany’s rich and vibrant economy, are the consumers ready for a deal like this?

-Well, they are, I mean it is a convenient factor, but of course you know, Kabel Deutschland does not agree to sell itself primarily for the benefit of the German consumer. I mean there’s a number of management, not just the very senior, but probably the top 30 or so directors are in extremely well incentivized to sell this company at the right price. And it looks a very attractive deal.

-I picked my way through the press release, not only are they well incentivized to sell it, but under the terms of the deal, many will stay.

-Well, that’s right,

-So they get the bonus, and they keep their jobs.

-Well, absolutely and the beautiful thing about the opposition package is their charge under it is it all depends on how much you’ve outperformed your peer group. And of course after a period of beat speculation in which as you mentioned liberty had been involved as well as Vodfone, that outperformance of the peer group is about as wide as they’re gonna get, so this is the maximum numbers of shares they can probably get, and they get them earlier than they would have done, so it’s a win-win for them.

-It’s three lemons on the machine for them, what about the possibility of a counter bid, I did read that, but if you look at the share price tonight, Kabel share price is about  85 Euros, that’s below the offer price, so that would tell me that the market doesn’t believe a counter bid is coming.

-This is smart move from vodfone, I mean, it’s a defensive move, because they have to make it, but they know that KPN and telephone like the Deutschland are in the background, they’d like to do this, but they haven’t got the balance sheet, and they know that liberty is tied up with the virgin media deal, and they’re not really in the position to do another one, to offer the all-cash deal that Vodfone can make available, so timing is precipitous for Vodfone, this is a great time to get in and keep the competition at bay.