T-Mobile Sells Broadband Business to CDS Group

T-Mobile Sells Broadband Business to CDS Group

T-Mobile Netherlands has agreed to sell Euronet, its fixed broadband business, to CDS Group, the owner of satellite pay-TV provider CanalDigitaal. Euronet, which serves around 270,000 customers under the brand names Euronet and Online, will remain an independent company alongside CanalDigitaal. Financial details of the transaction, which is expected to close in early 2014, have not been disclosed. T-Mobile said the sale completes its strategy, begun in 2012, of focusing on mobile internet. CDS said the sale will help it expand its offerings in the fixed internet and telephony market, beyond the triple-play packages already offered by CanalDigitaal.

Tarifica’s Take

While we have written recently about the viability of fixed-mobile synergies, T-Mobile Netherlands clearly believes that fixed line services are a hindrance in its quest for dominance in the mobile marketplace. As the second-largest MNO in the country, behind KPN, T-Mobile has an interest in forging ahead aggressively with mobile services. KPN and Vodafone already offer 4G; on 18 November, T-Mobile officially launched its own 4G network in four Dutch cities.

“Our strategy is to be the leader in mobile internet,” said Thomas Berlemann, managing director of T-Mobile Netherlands, by way of explaining the company’s streamlining approach. “The sale of Euronet to the CDS Group ensures that we can focus even more to achieve this goal.” We find it significant that Mr. Berlemann specified mobile internet. As far as revenue growth for MNOs is concerned, the future is in mobile data, not voice or SMS. In order to close the gap with the competition and stay vital, T-Mobile has chosen the strategy of concentrating its efforts—a strategy that makes a good deal of sense in today’s climate.