Vodafone Purchases Italian and Spanish Tele2 Units

Swedish telcoms company Tele2 has sold its Spanish and Italian units to Vodafone for €775 million (£537 million). Vodafone is the second largest mobile phone operator in Spain with 15 million customers, lagging behind Telefónicas with 22 million.

The purchase will give the mobile phone operator an additional 3 million customers, with Tele2 Italy having 2.6 million subscribers at the end of June (including 400,000 broadband clients) and Tele2 Spain having roughly 310,000 customers with over 240,000 broadband clients.

The move is an effort to expand Vodafone’s fixed line services, specifically residential broadband, in both countries, and also to rectify some of the damage the company suffered in June, when it lost the £339m auction of Spanish internet business, Ya.com, to France Télécom, owner of French service provider, Orange.

Vodafone offers residential broadband products in Germany through the fixed-line network it acquired seven years ago as part of the Mannesmann deal. The company is also a shareholder in French mobile operator SFR which bought the Tele2 operation in France earlier this year. Vodafone currently uses BT lines to provide residential broadband in the UK.

The company expects the transaction to be completed by the end of the year.