German ISP United Internet (UI) made a bid to acquire a majority stake in MVNO Drillisch and will look to merge its operations to create a “strong fourth player” in the country’s communications sector.
The deal will see Drillisch remain an independent company, but its customer base will be merged with UI’s 1&1 Telecommunication, which offers consumer fixed broadband and mobile services.
According to UI’s figures, the two brands have a combined customer base of 12 million comprising a mix of fixed and mobile connections. By combining the units, it believes the company can create a strong alternative to Telefonica, Deutsche Telekom and Vodafone in the country.
Drillisch was tipped to become a lively challenger in the German consumer market when it won exclusive access to Telefonica’s network as part of the latter’s deal to acquire rival E-Plus in 2014. In addition to capacity, the MVNO took over 301 shops and 300 employees from the operator.
To strengthen its hand, it also purchased the German unit of retailer The Phone House from Dixons Carphone during 2015.
In a statement today, Drillisch executive board representative Vlasios Choulidis said the company experienced rapid expansion in the last two years, growth he expects to continue as the share of Telefonica’s network it can access increases to 30 per cent by 2020, from an original 20 per cent.
“Our agreement with Telefonica continues to pay off,” he said: “It ensures us full access to next-generation network technologies for the coming years – and on very good terms.”
1&1 Telecommunication CEO Martin Witt added: “With its strong brand, 1&1 is already one of the leading DSL and mobile telecommunications providers in Germany. Together with Drillisch, we will be able to offer our customers an even more extensive portfolio of products.”
The stock and cash transaction offer will now go to Drillisch shareholders for approval. UI’s wholesale and B2B business will not be included in the transaction.
Germany’s mobile market is dominated by Telefonica, Deutsche Telekom and Vodafone. According to GSMA Intelligence estimates for Q1 2017, Telefonica’s O2 led the market with 43 million connections – excluding M2M. Deutsche Telekom had 36 million, followed by Vodafone with 31 million.