The agreements gives Digi the certainty and stability it needs to build out its own infrastructure in Spain as it prepares to move into other European markets
Telefónica and Digi have signed a new mobile network agreement to extend their long established relationship by 16 years. The two have also agreed to share their mobile spectrum in Spain in the 3.5GHz band and have signed a new, 10-year wholesale agreement for fixed broadband.
The deal marks Digi’s transition from an MVNO operational model in Spain to becoming a mobile network in its own right. Digi said the new agreements would allow it to “execute an efficient and timely transition of its mobile telephony business in Spain from a mobile virtual network operator (MVNO) to a mobile network operator (MNO) and to roll-out its own mobile network
Paving the way for Digi to become a credible fourth network operator in Spain was one of the remedies imposed on the market by the European Commission in return for approving the joint venture between Orange Spain and MásMóvil. At the end of March this year it had 5 million mobile customers, more than 1.5 million for fixed broadband and almost half a million for fixed voice.
The agreement between Telefónica and Digi will come into force on 1 January 1, 2025. Telefónica’s will provide national roaming services and share its RAN with Digi while the latter builds out its own infrastructure. “Telefónica increases its sustainability by ensuring a long-term revenue stream in line with the existing one. At the same time, the fixed broadband wholesale agreement has also been extended,” the press statement reads.
Both benefit from “efficient and cost-effective use of its new spectrum assets” as the two will pool spectrum in the 3.5GHz band. This is something of a trend in Spain. In May, Telefónica, Vodafone and Masorange reached a milestone agreement to improve 5G rural coverage by sharing their collective 30MHz in the 700MHz band. This frequency is best suited to wide coverage from a single antenna and indoor coverage.
The Spanish telecom market has experience seismic shifts in the last few months. In addition to the creation of Masorange, Vodafone Spain sold its business and assets into the country to Zegona Communications, in an unusual reverse buy-out.
The incumbent Telefonica is no longer the country’s biggest operator. Then to counter the Saudi sovereign fund acquiring roughly a 10% stake in the operator in Q4 last year, the Spanish government also invested
Meanwhile, Romania’s Digi group is becoming a force to be reckoned with in Europe. As of May this year, its share price had risen 63% over the last 12 months and in Q1 it doubled its profits. The group is looking to expand into other European markets, starting with Portugal and Belgium.