Telefónica, Masorange, and Vodafone have decided to join forces to maximize the profitability of their investments in fiber optics and thwart the expansion of Digi, a new competitor that is revolutionizing the market with unbeatable offers. This alliance is based on bilateral agreements between the three major operators, allowing them to share networks and resources to offer better services to their customers.
A Triangular Table for a Competitive Market
The announcement of Vodafone Spain’s acquisition by the British fund Zegona in October last year raised alarms at the other two major operators: Telefónica and Masorange. Both saw an opportunity in Vodafone’s hybrid fiber and coaxial cable (HFC) network, which reaches over 6 million homes. The collaboration between these companies aims to optimize their networks, reduce costs, and curb Digi’s growing market share.
Strategies and Benefits of the Alliance
The bilateral agreements between these three operators will not only allow them to split the cost of infrastructure but also address the debt that all of them carry. Additionally, sharing overlapping networks will reduce cable saturation on urban facades and improve operational efficiency. This joint strategy will materialize early next year and is expected to surpass regulatory scrutiny, as the basic structure of the cabling will not change significantly.
Impact on the Market and Regulation
Telecommunications sector analysts see this alliance as a masterful move to consolidate the market. “This plan had been brewing for many months,” says Joaquín Guerrero, an analyst at the consultancy Nae. The collaboration will not only enable Vodafone to free itself from its obsolete HFC network but will also facilitate the entry of new investors and external capital, further strengthening its position in the market.
Future Projections
The creation of these “fibercos” (fiber optic companies) is seen as a trend towards market consolidation, which could face regulatory hurdles. However, experts believe that the approval of these companies by the National Commission of Markets and Competition (CNMC) and the EU regulator will be favorable. The final decision will rest with the Ministry of Economy, which must consider the advice of the Ministry of Digital Transformation.
Investment and Expansion
The “fibercos” formed by these operators seek to attract investments from large specialized telecommunications funds like KKR or DigitalBridge. Furthermore, it is expected that other institutional funds such as Crédit Agricole Assurances and Vauban Infrastructure Partners will also show interest in these new companies. In the case of the collaboration between Masorange and Telefónica, long-term infrastructure usage agreements will be strengthened without the need for a third partner.
Conclusion
The alliance between Telefónica, Masorange, and Vodafone represents a solid strategy to curb the expansion of Digi and consolidate their position in the fiber optic market in Spain. These agreements not only optimize existing infrastructure but also ensure a better service offering for consumers. With the influx of external capital and cooperation between the major operators, the future of the fiber optic market in Spain looks promising and competitive.
Source: Merca2