Telenet Group, the largest provider of cable broadband services in Belgium has agreed to buy local mobile operator Base from Dutch Group KPN for £1.325 billion. The deal will now allow Telenet to strengthen its fixed line and internet services in Belgium, along with Base’s mobile networks.
“Through the acquisition of Base Company we have made a significant step to secure long-term mobile access conditions, ensuring we are well positioned to effectively compete for the future growth opportunity of mobile data,” said Telenet CEO John Porter.
With both fixed and mobile telecom services converge, the deal created a stronger player in Belgium mobile market. The combined company has an estimated sales of 2.4 billion euros and adjusted operating earnings of 1.1 billion euros. The company is estimated to generate £150 million by migrating Telenet mobile customers to the BASE network.
Very soon, Telenet will invest £240 million towards bettering the Base’s integration and to develop its infrastructure. The company will finance the acquisition using its liquidities and new debt.
Base is the third largest mobile operator in Belgium with 3.3 million subscribers. The company had an annual turnover of £690 million in 2014. According to the statements released by KPN in February, the net profit was continually declining due to the rising competition from free internet services like Skype. Selling Base to Telenet, will allow KPN to focus on its Dutch activities. It had earlier sold its German operator E-Plus to Spain’s Telefonica group last October for EUR 5 billion and a 20.5 percent stake in Telefonica Deutschland.