8 October 2007

LONDON - Mobile phone firm Vodafone has expanded its interest in the European broadband market, spending GBP 537m on businesses in Spain and Italy.

The UK-based telecoms firm is buying the divisions - which provide fixed-line telephone and broadband services - from Sweden's Tele2, the BBC reports.

Combined, the Spanish and Italian units have about three million customers.

Vodafone said it would benefit from "attractive high growth" in broadband use in the two countries.

The deal meant it immediately had the infrastructure it needed in place, the company said.

About 44% of Italian households are tipped to have broadband by the end of the year - up from 30% two years ago, the company said, with Spanish growth expected to have risen from 33% to 57% in the same period.

Vodafone chief executive Arun Sarin said the deal was "consistent with our strategy of meeting our customers' total communication needs".

"It will generate substantial time to market benefits in Italy and Spain where low broadband penetration and the market structure make ownership of fixed broadband assets attractive," he added.

"We have now established a clear route to delivering fixed broadband service in each of our major European markets."

Earlier this year, Vodafone made a move into the UK broadband market, launching its At Home service using BT Wholesale's broadband network.

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Subject: Spanish news