Telefónica is interested in reaching an agreement with the Vodafone Group for share their fiber optic broadband networks in Spain, something to which the British group could be inclined after its shareholders are putting pressure on its managers to streamline its operations. This is stated by Bloomberg, who has held an interview with the Telefónica COO, Ángel Viláin which he has indicated that they are «open and ready» to explore potential deals with Vodafone, and «in particular, in the case of fiber optics in Spain if they want to progressively eliminate their cable«.
The new CEO of Vodafone, Margherita Della Valle, is receiving pressure from shareholders with a large number of the operator’s titles to reach agreements with other companies, and thus reverse the situation of the decline in the value of their titles that the group is going through. Among those pushing hardest are the Emirates Telecommunications Group.
Vodafone’s operations in Spain have been a problem for the group in Europe for several years, due to declining revenues and a reduction in its market share. Last January, while still interim CEO of the company, Della Valle was downgraded from the division to the second smallest group of markets in Europe. Meanwhile, Vodafone Spain has attracted the attention of several potential buyers in recent weeks, including Apollo Global Management Group.
Although Spain has the largest fiber optic network in Europe, which includes systems deployed by Telefónica, Orange and several smaller companies, most of Vodafone’s network assets are older and less efficient cable. In addition, it has agreements with Telefónica and Orange to access their fiber networks.
As for Telefónica, it has spent several years trying to create joint ventures for the deployment and/or operation of fiber optic units in various markets. Among them, Brazil, Chile, Germany, the United Kingdom and various areas of Spain. This initiative stems from their attempts to reduce capital investment in them.
Telefónica and Vodafone are already part of a joint venture in the United Kingdom, CTIL, that is in charge of putting mobile towers into operation. Telefónica is also a wholesale customer of Vodafone’s cable network in Germany, while Vodafone is, in turn, a customer of the fiber optic network in Spain.
