Mobile network Vodafone has confirmed that it's in the "early stages" of talks with Liberty Global, the owner of TV and broadband provider Virgin Media. The company is discussing "a possible exchange of selected assets," but maintained that it was "not in discussions with Liberty Global concerning a combination of the two companies." Specific details on what those assets might be were not provided, but a deal could enable Vodafone to become a quad-play provider offering TV, broadband, telephone, and mobile services to customers.
The news follows months of speculation that Vodafone was interested in purchasing Liberty Global. In December of last year, Vodafone chief Vittorio Colao told investors that a takeover—which would cost the company well over £40 billion—wasn't on the cards. However, recent comments by Liberty Media chairman John Malone sparked rumours that the merger was back on, provided Vodafone was willing to split its Western European networks from other further-flung markets such as Turkey, South Africa, and India.
Vodafone may have reconsidered its position on Liberty Global following BT's purchase of mobile network EE for £12.5 billion (~€17 billion) earlier this year. The acquisition allows BT to offer customers landline, broadband, TV, and mobile offerings in a single package, without going down the route of becoming an mobile virtual network operator (MVNO) as Virgin Media has done with its quad-play bundles. Vodafone will also be facing increased competition from Three, which recently purchased fellow UK network O2 for over £10 billion (~€13.6 billion).
While Vodafone has confirmed talks are happening, it was also keen to point out that at this point there's "no certainty any transaction will be agreed, nor is there certainty with respect to which assets will ultimately be involved." But given the consolidation and increased competition in the UK telecoms market right now, one suspects that the company is working very hard to make sure these talks are successful.