It is October 31, 2023. The investment company Zegona announces an agreement with Vodafone to take over 100% of the business in Spain for 5,000 million euros. A day later, his CEO, Eamonn O’Hare, explains his plans to the media. They see business attractiveness and potential in Spain and are willing to maximize the benefit of their million-dollar investment (which they have to cover mostly with debt). His roadmap involves simplifying business, gaining market share with retail and business clients and maximizing assets such as his “underused fiber network,” he says. To pilot this change, Zegona wants José Miguel García.
The fund has received approval this week from the European and Spanish competition authorities to complete the operation and is expected to arrive at the headquarters of Vodafone Spain before the end of March.
Zegona has not arrived, and José Miguel García has not even been signed. But those two names together already caused a shiver in more than one competing manager in October. So much so that telecommunications in Spain have already begun to behave as if they had already landed in their positions.
These are two well-known veterans in the sector. Zegona demonstrated in the past, with the purchase of Telecable de Asturias and Euskatel, which he later sold to MásMóvil, his ability to buy telecos and maximize profits in record times. On the other hand, this manager is known as “a shark”, “a leader with an iron fist”. It has demonstrated, together with Zegona itself in Euskatel at first, and later in Jazztel, that it is capable of maximizing the capabilities of a project and making it grow with “aggressive, but not crazy” pricing policies, as they describe it. sector sources. And it is expected “that he will do it again with Vodafone.”
This, among other things, means that the effort made last year by large operators such as Telefónica, Orange and Vodafone itself to raise prices and stop the market trend is history. Any aspiration that this hypercompetitive market would take a break after the merger between Orange and MásMóvil, (whose outcome by Brussels has been delayed from February 15 to 22) has remained a mere fantasy.
Digi, the operator that now occupies fifth position in the ranking in Spain and aspires to fourth after the merger, did not join this price increase; It even increased the gigabytes it offers without changing the rate. This has allowed it, according to company data, to position itself as the operator that has gained the most portability in the month of January. Specifically, it added 117,200, 55% more. In 2023 it had also led portability, while the loss of customers in the large companies, mainly Vodafone, was overwhelming, losing almost 600,000 customers.
With the attempt to raise prices buried, the fight is once again fierce. Virtual operators are no longer only fighting in the low-cost field, but also in that of convergent offers (those that offer fiber, mobile and TV packages). Digi, Finetwork, PepePhone… the offers continue, even those from Vodafone Spain.
Its current CEO, Mário Vaz, has turned the ship despite knowing that he has little time left at the helm. The manager was elected in March 2023 by the Vodafone group to replace Colman Deegan as CEO, after the latter’s resignation. He is a man who must report to the parent company of the Vodafone group, but it has already thrown in the towel in Spain as confirmed by Margherita della Valle, the group’s CEO, in the last presentation of results.
This has left Vaz more freedom of action. “Without pressure from London, he makes decisions thinking about the country, not the group, and that gives another perspective,” say sources in the sector. Or in other words, Vodafone Spain has gone from languishing as the neglected arm of the British national company to being another active player in the price war.
Zegona has not arrived, but Vodafone is already heading towards the interests of its new owner. Lowi, its low-cost brand, has launched a fixed-mobile rate with 5G for less than 30 euros. But, what is most disturbing for Telefónica and Orange, is that it has announced that it is returning to football, which it had abandoned in 2022. It has bought the first and second division rights to La Liga, the UEFA Champions League and the Spanish championships from DAZN. MotoGP and Formula 1 and will be broadcast for the first time since 2022 through Vodafone TV Bars. They will not, at the moment, be available to private customers. And Zegona hasn’t even arrived.
