LONDON-Vodafone Group plc and France Telecom’s Orange both acquired stakes in the Swiss wireless market ahead of the country’s Universal Mobile Telecommunications System auction, set to begin next week.
Vodafone Group acquired 25 percent of the equity of Swisscom Mobile for $2.6 billion from Swisscom. The strategic partnership also incorporates a service agreement between the two operators.
In addition, Vodafone’s German mobile subsidiary, Mannesmann D2 Mobilfunk and Swisscom’s German subsidiary, wireless reseller debitel, will enter into an enhanced service provider agreement regarding UMTS. Debitel pulled out of the German UMTS auction and has said it is interested in providing virtual network operator services there instead.
Vodafone also said Swisscom Mobile will be separated from its parent Swisscom prior to the completion of the transaction. The transaction assumes Swisscom Mobile will obtain and pay for a UMTS license. The payment will be made either in cash, Vodafone shares or a combination of both, at Vodafone’s discretion, the U.K.-based operator said.
Swisscom will use the funds to purchase a UMTS license and roll out its UMTS networks and will retain the remaining 75 percent of Swisscom Mobile.
The acquisition is expected to be completed by the end of March 2001. Vodafone said Swisscom Mobile has a 67-percent market share and more than 3 million subscribers.
In a separate transaction, Orange plc has agreed to acquire E.on’s 42.5-percent stake in Orange Communications in Switzerland for $952 million. E.on is a German utilities group formed by the merger last year of Viag and Veba. Orange currently holds 42.5 percent of Orange Communications, so its combined stake will be 85 percent after the transaction.
The price will be paid 25 percent in cash and 75 percent in shares in the listed Orange plc, expected in early 2001. The Swiss deal will be completed prior to the start of the Swiss UMTS auction, Orange said.
Orange Communications began Swiss service in June 1999 and had 754,000 customers at the end of October, the companies said.
Switzerland’s third operator is diAx and is held 60 percent by Swiss Diax HOlding Co. and 40 percent by U.S.-based SBC Communications.
