Cable company Ziggo and telecoms group Vodafone are to merge their operations in the Netherlands in order to better compete with KPN, T-Mobile and Tele2.

Ziggo’s parent company Liberty Global is setting up a joint venture with Vodafone to create a new provider, the two companies said in a statement.

The British mobile giant will pay Liberty Global €1bn to ‘equalise ownership in the joint venture’, the statement said. The 50:50 joint venture will ‘create a national unified communications provider in the Netherlands with complementary strengths across video, broadband, mobile and B2B services.’

Mergers

Liberty Global took over Dutch cable market leader Ziggo in 2014 and merged it with its UPC cable operations under the Ziggo label. Ziggo itself was founded seven years ago following the merger of three separate cable operators.

The two companies expect the merger to create annual savings of €280m but have not given any details about potential job losses. Ziggo is already active in the mobile phone market via Vodafone’s network.

The merger still has to be approved by the relevant authorities and the two companies expect to complete the deal by the end of 2016. Together, the two companies have ’15 million revenue generating units’ the statement said.