Vodafone boosted by 1&1 5G network deal in Germany

1&1 AG

02/08/2023 13:13

LONDON, Aug 2 (Reuters) - Vodafone  VOD.L  said on
Wednesday it had agreed a long-term, exclusive national roaming
partnership deal to provide 5G mobile coverage to 1&1's
customers in Germany, in a deal which it said would be cashflow
accretive from its 2026 financial year.
    Vodafone's new Chief Executive Margherita Della Valle is
leading a turnaround of the group, and as part of that is
seeking to improve performance in its largest market, Germany,
where it has lost customers.
    Shares in British company Vodafone rose 3% in London and 1&1
 1U1.DE  soared 15%, set for its biggest one-day gain since
2008. 1&1, the mobile phone operation of German internet
provider United Internet  UTDI.DE , is building a fourth mobile
network. 
    The deal knocked shares in Telefonica Deutschland  O2Dn.DE ,
as 1&1 teamed up with its competitor Vodafone. Shares in
Telefonica Deutschland's parent company Telefonica  TEF.MC  also
slumped more than 7% in Madrid. 
    Vodafone said in its statement on Wednesday that the
commercial agreement with 1&1 was for 18 years, and would start
to deliver the 5G coverage to 1&1 customers from the second half
of 2024. 
    It added that wholesale costs would be indexed to Vodafone's
mobile network cost to reflect the impact of inflation and
technological developments. 

    

 (Reporting by Sarah Young; Danilo Masoni and Hakan Ersen)
 ((sarah.young@thomsonreuters.com; +44 20 7542 1109; Reuters
Messaging: sarah.young.thomsonreuters@reuters.net))