Vodafone Spain, MasOrange agree terms to create joint venture

With consolidation of assets seemingly the watchword for communications providers in both the fixed and wireless sectors across the world, Zegona Communications has announced that Vodafone ONO (Vodafone Spain) – which it acquired in May 2024 – has signed a confidential non-binding term sheet setting out the proposed key terms for a national network sharing agreement throughout Spain with fellow operator MasOrange.

The proposed move will involve Vodafone Spain and MasOrange – themselves the result of recent acquisition and merger activities – creating a joint fibre network company to be known as FibreCo, a merged company reported to be worth in the region of €10bn.

The new entity will cover approximately 11.5 million premises across Spain, and aim to provide fibre access services to both companies in this footprint. The initial ownership split of FibreCo between the three parties will be based on their customer numbers in the footprint.

The companies plan to bring a third-party financial investor into the share capital of the company, with the ownership split expected to be 50% for MasOrange, 40% for the financial investor and 10% for Vodafone Spain.

A 50-50 joint venture between Orange Spain and Másmóvil, MasOrange started operations in March 2024, and is currently the leading player in the Spanish telecoms market by number of customers.

Vodafone Spain and MasOrange said the new fibre company will benefit customers, as well as the Spanish market as a whole, and that it will guarantee access to the most modern fibre optic network, offering what they claim will be “best-in-class” quality, enabling the rapid adoption of new technologies while stimulating investment and innovation. They also believe the network will become a benchmark for sustainable development, meeting high ESG standards thanks to energy savings.

The Proposed Transaction is subject to final agreement between the parties and any required regulatory approvals. Commenting on what a completed deal could bring, Zegona chairman and CEO Eamonn O’Haren said: “Creating this new FibreCo in partnership with MasOrange is a key part of our plan to transform Vodafone Spain. It will deliver a highly efficient fibre infrastructure for our customers with leading fixed line technology which will be at the forefront of the industry. The proposed transaction is expected to create significant incremental value for all Zegona stakeholders. We will have more news to share as we progress the transaction to completion.”

Zegona completed the 100% acquisition of Vodafone Spain for €5bn on 31 May 2024. Boasting three strong brands and a highly converged customer base, Vodafone Spain is said to be the number-three player in Spain, with significant market shares in mobile, broadband and TV, and is regarded as a leading integrated operator with strong market positions in both consumer and business-to-business segments.

In March 2024, Vodafone agreed to acquire network operator Ono for a total consideration equivalent to €7.2bn, taking over a company with approximately 7.2 million homes released to marketing serving 1.9 million customers in 13 of Spain’s 17 regions.