The rumored move in the industry threatens to rewrite the history of telecommunications in Spain. According to El Confidencial, Telefónica is considering launching a takeover bid for Vodafone Spain, a move already backed by its main shareholders — SEPI, CriteriaCaixa, and the Saudi group STC — with discreet conversations ongoing with government representatives.
If confirmed, the Spanish market would shift from having four major players (Telefónica, Vodafone, MasOrange, and Digi) to almost three, with Telefónica and MasOrange holding the dominant share, leaving Digi as the only “outsider” with ambitions to challenge, thanks to the spectrum inherited from MásMóvil.
A déjà vu operation
The scenario inevitably echoes times when Telefónica held a
Telefónica’s CEO, Marc Murtra, justifies the plan with a discourse on European consolidation and industrial efficiency. But the question remains whether this consolidation will benefit the end consumer or result in less competition, less innovation, and higher prices.
Current landscape and the potential post-merger map
| Current Operator | Approximate Market Share in Spain | If Telefónica absorbs Vodafone |
|---|---|---|
| Telefónica (Movistar) | 29-30% mobile, >35% fixed broadband | Would exceed 45% in several key segments |
| Vodafone Spain | ~20% mobile, ~18% broadband | Absorbed by Telefónica |
| MasOrange (Orange + MásMóvil) | 28-30% mobile and broadband | Would remain the second largest bloc |
| Digi | ~10% mobile, growing in fiber | The only independent operator with significant presence, but still far from its own network |
Under this scenario, control would become concentrated in the hands of two giants (Telefónica and MasOrange), with Digi compelled to accelerate its network deployment to avoid relegation to a niche competitor role.
Regulatory and social risks
The deal would require approval not only in Spain but also from Brussels. The big question is: will the European Commission accept a consolidation that reduces the main players from four to three?
In other European countries, the EC has imposed strict conditions on similar deals, such as relinquishing spectrum or infrastructure to ensure competition. In Spain, the dilemma is even greater: Telefónica isn’t just any telecom company, but the heir to the state monopoly with some public stakeholding.
A step back for competition
The official narrative centers on “creating European champions” capable of competing with Deutsche Telekom, BT, or U.S. giants. However, critics argue that in reality, it’s a defensive move: securing market share in Spain to offset dismantling efforts in Latin America, where Telefónica has sold units in Colombia, Ecuador, Peru, Argentina, Chile, and Mexico, leaving Brazil as its last stronghold.
The problem is that this defense could come at the expense of consumers. Fewer operators mean fewer converged offers, less aggressive promotions, and ultimately, a less dynamic market.
Open questions
- Will Brussels and the CNMC accept a deal that reduces competition to three major groups?
- What will happen to Vodafone Spain’s employees if the merger proceeds?
- Will Telefónica’s history as an “uncovered monopoly” repeat itself?
- Can Digi, with its ongoing own network deployment, become the necessary counterbalance?
In short, if the takeover bid for Vodafone Spain materializes, it won’t just be a business move; it could be a seismic event in recent telecom history. Telefónica aims to revert to its “old self,” but at what cost to the market and, most importantly, to consumers?
via: elconfidencial and Teléfonos