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Dustin Kehoe,
Senior Analyst, Telecom Services - Central Europe

July 5, 2006

There is widespread media speculation that Arcor, Germany’s number two fixed carrier, is no longer up for sale by its majority stakeholder, Vodafone. Rather, it appears the operator is making a radical departure from its mobile-only strategy in favour of purchasing all of the outstanding shares of Arcor and becoming the sole owner. In the short-term, it appears that Arcor would offer mobile services and Vodafone would enter the DSL market. If the two companies do join forces, what will the organisation look like? What products can they really offer? How will this impact the German market? Should this be seen as a test bed for other markets?

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