“The merger of Orange and MásMóvil detonates a new market situation. Telefónica is no longer the first operator in the market and the justification for being regulated is over. The time has come.” With these words, the president of Telefónica, José María Álvarez Pallete, yesterday claimed the letter of freedom so that his company does not have its hands tied to compete in the new business scenario that opens up in Spain once the European Commission has authorized the merger between Orange and MásMóvil, which will give rise to the country’s first telecommunications company by customer volume.
Pallete wants to be free to compete in its price offer (it now needs the prior authorization of the Spanish Government) or not to have to hand over its networks in an obligatory manner “to anyone who passes by”, among other obligations inherited from its era of monopoly and holding company. The new scenario also favors a new position with regard to possible corporate operations. “Things are now becoming possible that would not have been considered before this merger”, assured the CEO of Telefónica, Ángel Vilá, in relation to the possible interest of the company in acquiring other operators in the market, despite the fact that “there is nothing on the table at the moment”.
What is in full negotiation is the extension of the current wholesale contract with Digi. The Romanian company has obtained the preferential right to use the mobile networks of Orange and MásMóvil as one of the concessions of the merger. “We are in a position to offer them an interesting price that prevents customers from migrating to other networks that do not have the same quality as ours”, pointed out Vilá.
This quality of their network is what they will use in front of Zegona, the new owner of Vodafone España, to keep valid the proposal to share fiber networks that Vodafone made before the summer.
A whole range of opportunities that Telefónica assures that it faces “with strength”, after closing a 2023 that Pallete described as “crucial” for having started a new strategic plan whose impact has already been tested. “We left the year 2023 growing in income, OIBDA and cash flow with particularly strong income in the business segment (B2B) and with a cash flow of 4.2 billion euros, 200 million above the our expectations”, emphasized the executive president.
According to the accounts that the company published yesterday, revenues for 2023 amounted to 40,652 million, 1.6% higher than the previous year, and all the objectives announced previously to the market were met. Despite this, the year also closed with net losses of 892 million euros due to the impact of the 1,350 million euros that had to be recorded in provisions for the ERO at Telefónica España. Another reason for the losses is the adjustment for the goodwill of VMO2, the company it shares with Virgin Telco in the UK, which suffered from the deterioration of the macroeconomic conditions in the country.
