Telecom Italia becomes second largest service provider in Germany leapfrogs on the back of AOL
Rating: buy your way to the top of the largest market in Europe
Telecom Italia and Time Warner Inc. today announced that Telecom Italia has finalized the acquisition of Time Warner’s AOL Germany Internet access business for €665 million ($877 million) in cash.
With the acquisition of AOL Germany’s Internet access business, Telecom Italia becomes, today, Germany’s second-largest internet service provider – with more than 3 million total subscribers, including nearly 2.1 million broadband customers.
Under a new partnership, as already announced, AOL will provide co-branded audience services and content on a joint web portal for all of Telecom Italia’s residential Internet access subscribers in Germany and will handle all online advertising sales.
Under the terms of the five-year partnership, AOL will design, host and operate audience services for Telecom Italia’s entire residential Internet access customer base in Germany.
What are the mobile implications?
So it is clear convergence is key. Telecom Italia is also a Triple Play provider in its home market. For years German companies have tried and failed to enter the Italian market and in one sweep Telecom Italia plants itself as the number two player in Germany. But its already evident that a pure broadband strategy is not enough. AOL is a great partner and guess what…. AOL already has its own mobile MVNO in Germany.
If AOL (new Telecom Italia business) can convert its existing broadband users to mobile and vice versa – you will have a new young but potentially dynamic triple play mobile MVNO in Germany that isn’t bundled in to the low revenue mobile distributor model. Telecom Italia might have paid for its entrance into the party - but its still in bed with Time Warner and AOL. An orgy of potential, wouldn’t you say.
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