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Liberty Global is selling its Austrian cable operations, UPC Austria, to Deutsche Telekom’s T-Mobile Austria unit for $2.25 billion, including debt.

Through the deal Deutsche Telekom’s unit will be able to broaden its service offerings to include broadband in areas where it currently only has mobile operations.

“Broadband is the indispensable foundation for a digital Austria,” said Andreas Bierwirth, CEO T-Mobile Austria, in an announcement about the planned acquisition. “It is our ambition to provide our customers, whoever and wherever they are, with the best possible seamless broadband experience for all of their needs through LTE, digital cable, fiber and future technologies like 5G.”

The transaction is part of Liberty Global’s efforts to reorganize operations in case merger negotiations with Vodafone start up again, Reuters reports.  

With the acquisition, T-Mobile Austria hopes to challenge the current market leader A1 Telekom Austria. Telekom Austria has about 1.5 million fixed-line broadband subscribers, compared to roughly 500,000 for UPC Austria, according to Reuters.

“This transaction highlights the strategic and financial value of our fiber-rich networks in a rapidly converging world and the significant synergies inherent in fixed-mobile mergers. We have operated in Austria for over 20 years and are extremely proud of the market-leading position we’ve built in both digital video and super-fast broadband,” Mike Fries, CEO of Liberty Global, said in a statement. “Looking forward, we believe the combination of UPC Austria and T-Mobile Austria will provide the national scale necessary to compete with larger companies like A1, and provide residential and business consumers with the highest quality services at the best price. We remain focused on value creation for our shareholders and are pleased with the premium valuation being attributed to one of our smaller operating markets.”

T-Mobile Austria said it will continue investing in its LTE buildout to ensure broadband connectivity in rural areas. That combined with UPC Austria’s dense urban fiber footprint, will give T-Mobile a “strong backbone for high speed mobile broadband access for next-generation network 5G,” the operator said.

The deal is expected to close in the second half of 2018.

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