Telefonica bid wins billionaire Slim’s backing

Spanish giant Telefónica said on Monday it had secured critical support in a sweetened takeover bid worth €8.55 billion or $11.4 billion for German mobile operator E-Plus.

Telefonica bid wins billionaire Slim's backing
File photo: Bjoern Gramm/Flickr

Telefónica said it had won backing for its improved bid from Mexican billionaire Carlos Slim's group America Movil, which is the main shareholder of E-Plus' parent, the leading Dutch telecommunications firm KPN.

"With this agreement, Telefonica comes close to the objectives announced at the end of July in reference to becoming Europe's second largest operator," the Spanish group said in a statement.

If approved by regulators and shareholders in KPN and Telefónica Deutschland, the takeover would create a major player in Germany with 43 million mobile customer and combined revenues of €8.6 billion, it said.

America Movil, which holds 29.77 percent of KPN and has announced plans to take over the group, gave an "irrevocable commitment" to vote for the Telefonica bid for E-Plus in a KPN shareholders meeting to be held October 2, KPN said in a separate statement.

KPN said it would receive €5 billion in cash and a 20.5 percent stake in Telefónica Deutschland after the transaction, up from the previous offer of €5.0 billion and a 17.6-percent stake.

"On the basis of these improved terms, the total implied transaction value for E-Plus is now €8.55 billion," it said.

Carlos Slim's America Movil said in a separate statement that it "remains committed" to its plan to make an offer for KPN.

It said the value of Telefonica's E-Plus takeover offer had climbed to €8.55 billion from €8.1 billion in the original bid announced on July 23. 

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There are still 16,000 public telephones in Spain

Spain has a law to provide at least one payphone for every 3,000 inhabitants, even though an average of one call a day is made from them.

There are still 16,000 public telephones in Spain
Photo: pawpopa3336/Depositphotos

New data reveals that Spain currently has over 16,000 public payphone dotted around the length of breadth of Spain even though an average of one call a day is made from them.

Telefonica sources cited by news agency Efe revealed that Spain's biggest telecommunications company currently spends €4.52 million a year maintaining the phone booths.

Despite the fact that they are rarely used, Telefonica is tied to a “universal service obligation” imposed by the government to provide and maintain in working order a public payphone for every 3,000 inhabitants in each town of 1,000 or more and one cabin in all municipalities of less than 1,000 inhabitants.

The company estimates that of the 16,000 currently in use, half are almost never used and 12,000 ceased to be profitable years ago, losing the company some €3 million  a year.

The number of payphones has been vastly reduced since the  introduction of mobile phones. Twenty years ago there were almost four times as many payphones across Spain  –  55,000 payphones available in 1999 – and you could expect to find one on many a street corner.

Spain's communications regulator CNMC has called on the government to drop the universal service obligation for public payphones after a recent survey found that nearly 9 in 10 Spaniards (88 percent) admitted to never having used a public payphone in their life.

When was the last time you used one?

READ ALSO: Could technology be killing off Spain's sociable mealtimes?