Vodafone Spain and MasOrange Join Forces for Fibre Network

Vodafone Spain and MasOrange Partnership Overview

Vodafone Spain, a prominent subsidiary of Zegona Communications plc, has embarked on an ambitious venture with MasOrange to establish FibreCo, a new fibre network company. This collaboration is poised to create the largest fibre-to-the-home (FTTH) network in Europe, extending its reach to an impressive 12.2 million premises across Spain. This strategic move promises to provide high-speed FTTH services to over 4.5 million customers, significantly enhancing digital connectivity in the region.

Objectives of the New Fibre Network

The primary goal of this joint venture is to streamline the network assets of both Vodafone Spain and MasOrange, fueling the swift adoption of advanced technologies such as XGSPON. Furthermore, the partnership is committed to upholding high environmental, social, and governance (ESG) standards. By focusing on energy efficiency and optimizing network utilization, FibreCo aims to deliver considerable energy savings, a gesture towards sustainable operations.

Financial Outlook for FibreCo

FibreCo is projected to reach an EBITDA of approximately €480 million within a span of three years. Currently, the firms are in pursuit of a third-party financial investor to contribute to the share capital of FibreCo. This prospective investor is anticipated to acquire a 40% stake, while MasOrange is set to maintain a 50% ownership stake, with Zegona holding the remaining 10%. The significant interest from potential investors underscores the appeal of FibreCo's infrastructure and its multi-tenant capabilities.

Impact on Vodafone Spain's Strategy

This venture closely follows Zegona's previous announcement regarding a partnership with Telefónica de España aimed at developing another fibre network covering 3.6 million premises. The creation of FibreCo in collaboration with MasOrange is pivotal for Vodafone Spain’s transformation of its fixed-line strategy, marking a significant step towards enabling nationwide FTTH services.'

Comments from Leadership

Eamonn O'Hare, Chairman and CEO of Zegona, expressed enthusiasm about the collaboration, emphasizing the advantages the partnership brings. He noted that guaranteed access to a comprehensive all-fibre national network, along with favorable economic conditions, will yield substantial cost savings for the business. There is an optimistic outlook for monetizing these network opportunities, ultimately benefitting shareholders through enhanced returns.

Regulatory Considerations and Future Steps

As the transaction progresses, it must clear customary regulatory approvals, with an expected completion by the end of the first half of 2025. The strategic partnership not only enhances Vodafone Spain and MasOrange's position within the fiber network services sector but also reflects a robust commitment to advancing digital infrastructure.

Frequently Asked Questions

What is FibreCo?

FibreCo is a joint venture between Vodafone Spain and MasOrange aimed at creating the largest fibre-to-the-home network in Europe, covering millions of premises.

What technologies will FibreCo utilize?

FibreCo plans to adopt advanced technologies such as XGSPON to enhance network performance and efficiency.

What are the financial expectations for FibreCo?

FibreCo is projected to achieve an EBITDA of approximately €480 million after three years of operation.

What ownership structure will FibreCo have?

MasOrange will retain a 50% stake, Zegona will hold 10%, and a third-party investor is expected to acquire 40% of FibreCo.

When is the expected completion date for this partnership?

The transaction is anticipated to be completed by the end of the first half of 2025, pending regulatory approvals.

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