MasOrange intends to shake up the telecommunications market even further. Its negotiations with Vodafone to create a subsidiary specialising in fibre optics are not only going well, but the latest information reaching the press puts the price at 40% of the stake it would sell. Its plans are well established to provide it with a market force that would put it ahead of its rivals.
In May, there was already talk of these intentions of collaboration between the two operators. Now the plan is moving forward and it has been discovered, as published by Expansión, that 40% of this new subsidiary specialising in fibre optics would be put up for sale for a figure of between 1.5 and 2 billion euros. With this amount, they would be in a position to reduce debt and establish their accounts in a stable manner while, at the same time, not losing control of their new company.
MasOrange and Vodafone’s plans
In the organisational structure that is being proposed for this new company, MasOrange would have the largest shareholding, with around 50% of the shares. Vodafone, on the other hand, would play a more secondary role, with around 10%. These figures make sense, especially considering the number of FTTH real estate units that each of the two operators is going to put up.
While estimates indicate that MasOrange will put up around 9 million, Vodafone will put up around 3 million. It should also be noted that Vodafone has deployed these real estate units with the support of MásMóvil and Orange, so everything fits together easily. In addition, Vodafone would also bring its cable network customers to the table, an important added value when launching this new company.
When will the new company be created?
The idea that MasOrange and Vodafone have is that by the end of July they can take the first step, which is the signing of the agreement by which they would commit to the creation of the company. From that moment on, the next thing they will do is start looking for an investment partner who might be interested in the operation. The objective is to find a partner who does not want to have control over the entity, so they are looking for an entity that wants to make a profit from its investment. This opens up a wide range of possibilities in the pension fund or insurance sector.
The creation of the company would take place as soon as a partner is found who is interested in acquiring the 40% of the new fibre optic company. For now, there is no exact timetable for the situation and it is mentioned that, possibly due to the current dates, if the agreement is not signed by the end of July, it would be postponed to September.
The combined value of the company would be between 7.5 and 10 billion euros, including debt, while the latest estimate mentioned by Expansión on the number of households that would be covered is stipulated at 12 million. Previously, the figure had been set at between 10 and 11 million UUII accesses, but the latest estimate has raised the number to 12 million. This indicates that it would be a new company that would cover 60% of the Spanish market. It should not be forgotten that MasOrange already combines the business of MásMóvil and Orange, so the addition of Vodafone would be an important milestone for the way in which they cover the market.
Today, MasOrange has 42% of the market, while Vodafone is established at around 18%. This trident of operators would provide, above all, stability. What MasOrange and Vodafone would like to demonstrate is that they would be prepared to deal, for example, with the loss of customers who change operators. After all, with this market coverage, everything would remain in-house except in those cases in which customers opt for Movistar, O2 or Digi.
Although it remains to be seen how the company materialises and whether it encounters problems from the competition authorities, for now various ideas are still being considered. One of them could be that the subsidiary would be used as a self-service company, which would not open it to third parties and could avoid problems with competition. However, it remains to be seen how everything develops in the coming weeks.
