Telefónica SA and Masorange have had informal conversations about a possible agreement for Vodafone Spain, said people familiar with the matter, A measure that could lead to greater consolidation in the country’s telecommunications market.
One of the possible scenarios that are being explored would be the disintegration of the fixed and mobile or business operations of Vodafone Spain, due to possible competition problems, according to the sources. Masorange could also acquire the low -cost brand of Vodafone, said one of the sources, who asked not to be identified since the information is private.
The acquisition of Vodafone Spain could also be expensive for any telecommunications operator in Spain, according to sources. The private capital firm Zegona Communications PLC. acquired the Spanish operations of the old Vodafone Group PLC last year for about US $ 5.7 billion.
Exploratory conversations occur after the calls of the president of Telefónica, Marc Murtra, to a generalized consolidation among European telecommunications companies, a key market for the company being Spain. Telefónica and Masorange have not initiated formal deliberations or submitted formal proposals to Zegona, according to the sources.
There is no guarantee that a transaction is completed, given the possible problems of competence and financing, they added.
A possible agreement with Vodafone Spain, to be completed, could follow the example of 2020, when Telefónica and two rivals in Brazil joined forces to acquire another local competitor. The three buyers divided OI assets and They obtained regulatory approval for this unusual operation, arguing that it would benefit the national market by strengthening the remaining participants.
The Spanish telecommunications market has been in the process of consolidation in recent years. Masorange It was created in 2024 after the merger for US $ 21,212 million between Masmovil and the Spanish operations of Orange SA, in an operation that gave rise to the largest operator in the country by number of clients. Orange has half of the company, and the rest is in the hands of three private capital firms.
The fusion between Masmoble and Orange did not contribute to significantly reduce competition in one of the most aggressive markets in Europe. The competition is especially fierce in the low -end segment, where the number of customers who change operator for price reasons is still a great concern for operators.
Zegona, which is quoted in the London Stock Exchange, completed the acquisition of Spanish Vodafone assets last year. Vodafone Spain has had difficulties for years, partly because its broadband of fiber optics depends to a greater extent on old cables.
Vodafone Spain and Masorange They are working on the creation of a fiber networks in the country. Telefónica still dominates the business services segment in Spain.
For Telefónica, a key concern in any operation is its high leverage ratio, since its credit rating is at the lowest level of investment grade. Murtra has affirmed that he will do nothing that negatively affects the company’s investment profile.
However, Telefónica can find ways to obtain financing without affecting its leverage ratio, according to one of the sources.
