Vodafone Secures Controlling Stake In Kabel

Reuters Business Report - Europe's biggest mobile operator just got bigger.

Vodafone has secured the 75 per cent stake it wanted in Germany's Kabel Deutschland.

Ironically, it's the fixed line operations of Kabel that have caught the mobile giant's eye.

Those give it scope to launch multi-media or 'quad' services - that's a package of TV, broadband, mobile and fixed line - to compete with Deutsche Telekom.Crucially, says IHS's James Allison, such packages tie in customers - and their revenues - for longer.

IHS GLOBAL TELECOMS ANALYST, JAMES ALLISON:

"The real thing it gives them is that once you've taken one service with an operator, you're less likely to switch. If you take three or four, your inclination to switch is much lower, because it's so much more hassle to switch."

European Commissioner Neelie Kroes's plan to free up telecoms and cut roaming charges turns up the pressure on mobile operators to find new revenues.

Or cut costs.

That COULD mean a new round of consolidation in the industry, with O2 Germany and E-Plus expected to be next in line.

More could follow suit.

IHS GLOBAL TELECOMS ANALYST, JAMES ALLISON:

''There are a lot of smaller independent operators in Europe that operate in one or two countries. I anticipate that these will get combined so that they have the scale to compete across Europe.''

The Vodafone-Kabel deal now goes before European regulators.

They're expected to give an initial decision later this month.