Why did Ziggo's board ask Obermann to become CEO?

The Netherlands' largest cable operator Ziggo announced that Rene Obermann, until the end of this year CEO of Deutsche Telekom, will take over from Bernard Dijkhijzen next year as CEO of Ziggo. DT announced already in December that CFO Timothy Hoettges would succeed Obermann. In January Obermann hinted that he was looking for a smaller employer, not in Germany or the US, in order to get closer to the business. 

The appointment is remarkable for three reasons: Obermann is going from a global player to a local (even regional) company; he is making the switch from the copper to the coax world; and he remains head of DT until the end of this year, and hence also of T-Mobile Netherlands, a Ziggo competitor.

What Obermann himself says aside, one can only speculate about the reasons for the move. If one assumes he did not apply for the job and was solicited by Ziggo's supervisory board, the question is then, why?

Obermann offers a number of areas of expertise that likely charmed the supervisory board at Ziggo:

• The telecom world. Although the differences with cable are slowly disappearing, especially as telcos now offer TV services.
• Regulation.
• Mobile. Ziggo has chosen to centre its mobile strategy around Wi-Fi, complemented by its LTE-2600 network, and if really necessary, a roaming agreement with Vodafone. This makes the mobile expertise of limited use, unless Ziggo makes a shift towards a complete mobile strategy.
• Multinational. DT is active in Germany, 12 other European countries and the US (plus other countries where T-Systems may have customers).

The first three don't seem very relevant (unless Ziggo suddenly decides to become a full mobile operator). What remains is Obermann's experience in portfolio management, or better said: mergers and acquisitions. If this is the expertise the supervisory board is seeking, that could mean one of two things: either Ziggo is planning to consolidate the Dutch market, or it's planning to expand abroad. 

On the Dutch market, there are various assets up for sale:

• T-Mobile (with or without online.nl). We found that at DT's last strategy presentation its commitment to the Netherlands was uncertain. However a takeover of T-Mobile would turn Ziggo's mobile strategy upside down.
• UPC. If Ziggo doesn't want to sell itself to Liberty Global, then it could try the reverse and bid for UPC.
• Caiway. CIF tried to sell the company to KPN, but was unsuccessful. Caiway is experienced in offering services over fibre, which could be useful for Ziggo if it decides to expand outside its footprint.

On the international front, Liberty Global is the current ruler of the roost, with recent expansions in Germany, Belgium and the UK. Ziggo may want to make its mark here too. Obermann's experience on the German market could be used to launch a bid for Kabel Deutschland. There are a number of other cable operators in Europe in the hands of private equity companies that could also be for sale, such as Numericable in France, Ono in Spain and Com Hem in Sweden.

There is one other possible scenario. When the former Microsoft executive Stephen Elop was named CEO of Nokia, speculation started over a possible Microsoft takeover of the Finnish company. In a similar vein, Ziggo's board could be hoping for a takeover by Deutsche Telekom. 

In the end, it remains a guessing game as to why Obermann got the job.