Who will reign in Spain? Vodafone says it’s not plain
Orange Spain has confirmed its intention to be the major partner in the future merger with MásMóvil, Spanish newspaper Cinco Dias has reported.
The Orange Group subsidiary intends to acquire the majority of the shares of the joint venture at a later date, according to CEO Jean-Francoise Fallacher. The merger with MásMóvil is currently under negotiation but the agreement signed in early March between Orange and Lorca JVCO, the parent company of MásMóvil controlled by Cinven, KKR and Providence, stipulates equal voting rights in the resulting combined entity. However, the agreement includes the right to launch a Public Offer for Sale (OPV) under certain conditions agreed by both parties, as well as the right of Orange to take control and consolidate the resulting combined entity in the event of this IPO.
The message from Orange’s Spanish CEO is that it intends to be the industrial partner of the new group, valued at €19,600 million, making it the Spanish market leader in mobile lines and fixed broadband. Spain is the Orange Group’s second largest income contributor after France.
Speaking at an event organized by El Español, Fallacher said Orange is not leaving a market where it is the second largest operator and wants to be the main player. Negotiations between both parties are continuing, Fallacher said, hinting that the next stage of their coming together could be formally signed off in summer, as was the original plan when the two parties signed their first pact. The closing of the operation, once the permits are granted by competition authorities, including the European Commission, would take place in the second quarter of 2023.
Meanwhile, Vodafone Spain’s CEO Colman Deegan has welcomed the move, telling Cinco Dias that previous periods of consolidation had been positive for the domestic mobile telephony market.
The merger of two rivals will represent a big opportunity for Vodafone Spain because, Deegan observed, in many European markets the third operator is “the one that grows the most” and presents better returns on investment. History also tells us that previous periods of consolidation have been positive for the Spanish mobile telephony market, Deegan said.
Deegan disclosed that Vodafone has a goal to ensure that at least 20 per cent, but ideally 30 per cent, of its network comprises Open RAN components.
Vodafone Spain opened a 5G lab in December 2021 and in the new year it promised to provide 5G coverage via the 700 MHz frequency in 109 municipalities in 30 provinces during the course of the year. The telco secured 2×10 megahertz of spectrum in the 700 MHz band in July. Vodafone initially launched 5G services in Spain via hybrid 4G/LTE systems in 2019, the later used Amdocs to rationalise them. It launched a pre-commercial 5G SA network in June 2021.