Movistar seeks to take advantage of the merger by negotiating with Masorange the purchase of its 5G frequencies

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Telefónica is working to obtain benefits from the agreement between MásMóvil and Orange, reinforcing its infrastructure with part of the 5G frequencies that are currently under the Masorange umbrella. And that, by legal imperative, the merged company is obliged to divest.

Since last April 3, and after many months of negotiations, Masorange became a reality. The merger between Orange and MásMóvil resulted in the emergence of a new leader in the telecom sector within the national territory. A scenario that, far from frightening the rest of the agents that make up this area, has provided an opportunity for some of them to try to take advantage of the merger.

As Expansión advances, Telefónica would be in negotiations with Masorange, current market leader by customer volume, to be able to access the purchase of radio frequencies from the resulting company. The blue operator would be taking advantage of the fact that the merged firm would be obliged to get rid of that spectrum to strengthen its infrastructure and take a step forward compared to its competitors.

Masorange, forced to sell

The merger between Orange and MásMóvil It added a total of 190 MHz of the 3.5 gigahertz (GHz) band, 110 MHz coming from Orange. While the remaining 80 MHz were provided by MásMóvil. The European Commission, with the aim of safeguarding the competitiveness of the operators, interceded in the operation, forcing Másorange to get rid of 20 MHz through a sale to Digi. Therefore, the current amount would be 170 MHz. A figure that still exceeds by 30 MHz the maximum limit set by the Spanish Executive, located at 140 MHz.

Given this scenario, Telefónica has seen the perfect opportunity to take advantage of the operation. Negotiating with its main competitor to be able to obtain those 30 MHz that currently represent a problem for the merged company. Whose only options are to negotiate with any operator or, failing that, transfer the spectrum to the State. If we take as a reference the last auctioned price of that spectrum in 2021, these 20 MHz would have a value close to 63 million.

Yeah MoreOrange If he opted for the second option, he could not prevent the band from ending up in the hands of some of its main competitors. Since the State would be obliged to sell these frequencies to an operator through a tender. Therefore, the result would be the same, but without any economic benefit for the new Spanish leader. A movement that would be completely meaningless.

Until the end of August

According to current regulations, since the company’s incorporation, the merged company only has five months to get rid of the frequencies that it cannot use. Therefore, the deadline would be at the end of August, as long as none of the mechanisms contemplated by the law that allow extending the negotiation period and that seem to be currently being contemplated are activated.

In the event that the operation is completed, 5G frequencies They would be quite balanced between all operators. He first place Masorange would take it, controlling 140 MHz. Telefónica would follow closely, with 130 MHz after the closing of the operation. Vodafone would have 90 MHz and, behind this trident, would be Digi with the 20 MHz recently purchased from Masorange.

Telefónica’s interest aligns perfectly with the latest movements carried out by Movistar. Which is carrying out the largest 5G network deployment in the 3.5 GHz bank. At the end of 2023, Telefónica doubled Masorange in the number of antennas installed in this band: 4,000 antennas by the blue operator, compared to the 2,000 from the merged company.

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