- Vodafone has completed the sale of its Spanish arm to Zegona
- José Miguel García is the new CEO of Vodafone Spain
- Spanish market enters new era following structural changes
Vodafone Group has formally exited the Spanish market following the completion of the sale of Vodafone Spain to Zegona Communications for a total fee of €5 billion, of which €4.1 billion in cash.
The U.K.-based group announced at the end of last week that the transaction has been concluded, although it did note that it will provide certain services to Vodafone Spain and maintain its innovation hub in Málaga.
The move represents the latest major change on the Spanish telecom market following the recent merger of Orange Spain and Masmovil to form MasOrange, as well as the potential transformation of Digi Spain into the fourth mobile network operator.
Experienced team
Vodafone first announced the plan to sell its Spanish operations in October 2023, so the transaction has been relatively swift compared to other deals, such as those that involve the merger of two telcos.
Zegona is an investment firm established in 2015 by two former Virgin Media UK executives, Eamonn O’Hare and Robert Samuelson. It also has previous experience in the Spanish telecom market as it acquired Spanish cable player Telecable in 2015, and then sold it to regional player Euskaltel in 2017, in turn buying 15% of the latter. Masmovil subsequently acquired Euskaltel in 2021.
According to Zegona, although Vodafone Spain is the number three player in Spain it has “significant market shares in mobile, broadband and TV.” The firm has already appointed José Miguel García, a former CEO of both Jazztel and Euskaltel, as the new CEO of Vodafone Spain, replacing Mário Vaz.
Zegona Chairman and CEO O’Hare said the appointment of García reunites a team “that has a proven track record of highly successful operational transformations in Spanish telecoms.”
He added: “The new 10-year network access agreement signed with Finetwork earlier this week demonstrates our ability to move on our well-defined strategy. With our proven track record, we are confident we will improve the performance of Vodafone Spain whilst delivering significant value for shareholders.”
Here, O’Hare is referring to the renewal of a wholesale access deal with independent fiber and mobile operator Finetwork, which has been working with Vodafone for the past five years.
Shifting sands
Despite Zegona’s confidence stance, Vodafone Spain faces significant challenges, not least following the creation of MasOrange, which presents a new competitive threat to both Telefónica and Vodafone Spain.
In addition, the requirement for remedies to gain European Union approval of the MasOrange merger means that a fourth MNO could enter the fray in the form of Digi Spain, which now has spectrum and wholesale network arrangements at its disposal.
Moreover, while Digi signed an optional national roaming deal with MasOrange as part of the merger remedies, it is working on a new wholesale, roaming and network sharing deal with existing wholesale partner Telefónica, details of which have yet to be disclosed.
To be sure, the Spanish telecom market is no stranger to structural change, with numerous acquisitions of mobile and fixed providers having taken place over the years. For example, Orange previously bought fixed player Jazztel; Vodafone acquired cable provider Ono; and Masmovil has mopped up several mobile players including Yoigo.
Vodafone hopes end of transformation is in sight
As for Vodafone, the sale of Vodafone Spain is one of three key undertakings kicked off by Group CEO Margherita Della Valle to overhaul operations in mature European markets where there is little growth.
Elsewhere, the group is still in the process of selling its Italian unit to Swisscom, and it is also seeking secure antitrust approval for the proposed merger of Vodafone UK with Three UK.
Swisscom has just received partial regulatory clearance for its proposed acquisition of Vodafone Italy – an €8 billion deal that is expected to complete in the first quarter of 2025.
However, while the U.K. merger transaction has been given conditional approval by the government on national security grounds, it remains unclear what the outcome of the in-depth investigation by the Competition and Markets Authority (CMA) will be.
Indeed, in May the CMA said it decided to extend the inquiry period, which previously had a statutory deadline of Sept. 18, 2024, because Three UK’s parent company CK Hutchison failed to provide certain documents and information by May 9. On June 3, the CMA restarted the process, although it has extended the statutory deadline by 24 days to Oct. 12, 2024.
Della Valle has made it clear that Vodafone is not planning any further major deals after offloading its Italian and Spanish units. “We are done,” she reportedly told The Sunday Times (paywall).