Movistar and Vodafone are working at full capacity with the aim of signing the binding agreement that will lead to the formation of a new fiber company between them. It will be, without a doubt, an important moment for the telecommunications sector in view of the path that Telefónica and Zegona are going to take together.
The news about the joint project between Telefónica and Zegona, Movistar and Vodafone respectively, was published previously. The intention of these operators to create a new company like NetCo or FibreCo, a wholesale fiber optic entity, was put on paper. Now the project is so advanced that, according to sources who have spoken with Expansión, it is mentioned that the binding agreement could be signed in the next few hours. And, if it does not happen today, it seems that it will be signed in the coming days.
The process is progressing at a good pace
The non-binding agreement between both parties, which was the first step in this interesting path that Telefónica and Vodafone are going to take, was publicly announced on July 30. Since then, the operators have not stopped working to give shape to this project. From what is said, it would only be necessary to square some relevant aspects so that the binding agreement can be signed. Once this signature is made, the two operators will more closely visualize the creation of their joint fiber optic entity that will open a new avenue of business.
For the project to have reached the determining point at which it is, Telefónica and Vodafone have worked together with Barclays and BBVA. These banking entities are the advisors of Zegona and Telefónica respectively, so they have played a crucial role in providing their support and getting the company to move forward.
What is the next step?
The moment the binding agreement is signed it will mean that both Telefónica and Vodafone can get to work to find the third pillar of their project. As they said at the time, what they will need is a financial partner who will take care of providing capital. The company will need funds and, to obtain them, they will publish a document that will serve to capture the interest of potential investors. According to what is said, this document could be available this November, which means that Movistar and Vodafone do not want to waste time.
Once that third pillar is found that will shape the company, the organizational chart with which control will be divided would be, according to previous information, around 50% for Telefónica, 10% for Vodafone and 40% for the investing company. With this division, both operators will have room to obtain funds that would bring a breath of fresh air to the coffers of both entities. This will be especially beneficial for Vodafone, who will benefit from the economic injection to pay off debt and thus stabilize after the purchase operation carried out by Zegona.
If the forecasts reported by knowledgeable sources are met, the desired value for this joint venture would be between a minimum of 2,000 million and around a maximum of 2,500 million. These are positive forecasts that will make this fiber optic company debut strongly, indicating that it will have a footprint of 3.5 million homes covered with the FTTH fiber optic service to the home provided by Movistar and Vodafone.
With these data, it is referred to that the company will have 1.4 million clients, a figure that will help the income obtained by the new entity to be immediate. For the investor they are looking for, it is a very attractive proposal that will help them find a financial partner quickly. Therefore, taking into account everything we have indicated, it is possible that the movements around the creation of this new company will be carried out in a short period of time.
