- MasOrange and Vodafone Spain plan a fiber-sharing venture, with potential for a third investor
- Local media reports say MasOrange is looking to reduce its reliance on Chinese vendors for 5G, with ZTE set to lose out initially
- Ericsson and open RAN could gain from the move
Spain’s MasOrange is looking ahead to how it will manage and expand its fixed and mobile networks in the future in a market that has been transformed in recent months following ownership changes and the emergence of Digi Spain as the fourth mobile network operator.
With regard to its fixed network, the 50:50 joint venture that is now Spain’s largest telecom operator in terms of customers has just announced plans to potentially form a shared national fiber network with rival Vodafone Spain, which is now owned by Zegona Communications after Vodafone Group exited the market in June.
If the plan comes to fruition, the aim will be to create a network that covers about 11.5 million premises in Spain, based on network sharing. The two partners also intend to bring in a third-party equity investor, although no details so far have been revealed. According to Zegona, MasOrange would own 50% of the new venture, while Vodafone would hold 10% and the financial investor 40%.
Spanish newspaper Expansion reported that the joint venture would have an enterprise value of between €7 billion and €10 billion and suggested the 40% stake would be sold for €2 billion.
During the Orange Group earnings call last week, Laurent Martinez, chief financial officer at Orange, noted that Spain is a “very competitive market not only in retail, but also in networks. So we have a lot of fibercos, and MasOrange wants to be in the forefront of a possible consolidation in this market, so playing an active role.”
5G vendor switch
This week, MasOrange’s infrastructure strategy remained a topic of conversation, although the focus turned to its 5G network and the equipment vendors the operator plans to use in future.
According to Expansion, the operator is planning some fairly drastic changes that could see it jettison ZTE completely, reduce the influence of Huawei, and increase Ericsson’s share as part of a long-term strategy by MasOrange to lessen its dependence on China-based vendors.
As also reported by ADSLzone, which referenced Expansion, ZTE would be removed in the period from 2024 to 2027, losing the 4% of service it currently provides to MasOrange. ZTE reportedly began providing 5G equipment to the former Orange Spain in certain cities in 2020.
After 2028, MasOrange would then cut Huawei’s share of its 5G network from 54% to 39%, increasing Ericsson’s share from 42% to 61% and potentially making Ericsson its sole 5G supplier over the longer term. However, it seems that this will also depend on the Swedish vendor’s commitment to deploying and supporting open RAN technology, as well as providing financial incentives.
The operator also plans to continue the expansion of its 5G network this year, with the aim of covering all towns and cities with more than 10,000 inhabitants (around 750 towns). It said its 5G network currently covers over 85% of Spain’s population.
Furthermore, it was reported in May that Telefónica, Vodafone and MasOrange have agreed to pool their spectrum in the 700 MHz band for rural 5G, enabling them to benefit from subsidies from the Unico Redes Activas program, in towns with 10,000 inhabitants or fewer.
Meanwhile, MasOrange has also just reported its first interim results, with a 0.1% increase in revenue to €3.6 billion in the first half of 2024. Adjusted EBITDA was up 6.7% at €1.3 billion. The operator now has 6.8 million fiber-to-the-home clients and 25.8 million mobile customers.