By Adria Calatayud

 

Shares in 1&1 jumped Wednesday after the telecommunications operator said it has reached an agreement with Vodafone Group for a long-term exclusive wholesale agreement in Germany, sending shares in current partner Telefonica Deutschland sharply lower.

At 1214 GMT, shares in 1&1 traded 11% higher at EUR11.36. Meanwhile, Telefonica Deutschland shares fell 14% to EUR2.09, dragging down majority owner Telefonica, which fell 6.4% to EUR3.58.

1&1 and Vodafone's German business entered into a binding preliminary agreement for a roaming partnership in Germany, with a final deal due to follow as soon as possible, the companies said. The partnership will run for up to 18 years and will come into effect in the second half of 2024, they said.

The agreement grants 1&1's customers access to Vodafone's roaming services--including its 5G network--in areas not yet covered by 1&1's own network, the companies said. 1&1 will pay a price based on the percentage of the Vodafone network used by its customers that will be indexed to Vodafone's costs, the companies said.

1&1 and Telefonica Deutschland in 2021 signed a roaming contract that had a term of five years starting retroactively from July 2020. Analysts at UBS as recently as last week said in a research note that a new deal between 1&1 and Telefonca Deutschland shouldn't be ruled out.

Before Wednesday's rise, shares in 1&1 were down 11% since the beginning of the year, partly due to concerns about the costs of building its own network.

 

Write to Adria Calatayud at adria.calatayud@dowjones.com

 

(END) Dow Jones Newswires

August 02, 2023 08:41 ET (12:41 GMT)

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