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Vodafone’s CEO Nick Read says that consolidation of the Spanish telecoms market is “probably needed”, amidst speculation that Vodafone Spain could be merging with MasMovil
For many months, rumours have been circulating that MasMovil and Vodafone were exploring the possibility of merging their Spanish businesses. Such a consolidation would reduce the number of major players in the market from five to four, leaving the new joint entity in a good position to take on Telefonica’s Movistar, which currently dominates the market.
However, both Vodafone and MasMovil have been keeping any alleged discussions strictly under wraps, with MasMovil CEO Meinrad Spenger calling the rumours “more bluff than reality” back in October. Nonetheless, anonymous sources were again leaking news of discussions about a potential deal to the media just last week, with the suggestion that such a merger could also include Vodafone’s Portuguese unit.
Yesterday, Vodafone CEO Nick Read did little to dispel the claims of merger discussion, noting that consolidation was “probably needed” in the Spanish market, adding that “we explore opportunities to add value all the time.”
Vodafone Spain itself has been struggling to make significant gains in the Spanish market over the last few years, with financials further impacted by the coronavirus pandemic, especially through lost roaming revenues. Nonetheless, Read said that the company is now “firmly back into growth”, which they expect to increase further as the coronavirus situation improves and travel increases.
But it may not only be Spain that is ripe for telecoms consolidation. While the EU regulators are typically very strict about allowing any reduction in market competition, last June saw the EU’s antitrust chief notably encouraging more cross-border deals in the telecoms sector, with analysts suggesting that M&A in the industry would likely increase as the Covid-19 vaccine programme rolled out, lowering risk.
The Intelligence’s Europe Telecommunications 2021 Outlook, published by Bloomberg at the end of last year, showed Spain and Sweden as the most likely markets to see consolidation, while also predicting the Netherland’s KPN and the UK’s BT as targets for M&A in 2021.
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