It is October 31, 2023. The investment company Zegona announces an agreement with Vodafone to obtain 100% of the business in Spain for 5,000 million euros. A day later, its CEO, Eamonn O’Hare, explains to the media his plans. They see attractiveness and business potential in Spain and are ready to maximize the benefit of their million dollar investment (which they have to cover mostly with debt). Its roadmap calls for simplifying business, gaining market share with retail and enterprise customers and maximizing assets such as its “underutilized fiber network,” he says. To pilot this change Zegona chooses José Miguel García.
This week, the fund received the approval of the European and Spanish competition authorities to complete the operation and it is expected that it will land at Vodafone Spain’s headquarters before the end of March.
Zegona has not arrived, and José Miguel García has not yet been signed. But these two names together already caused a shudder in more than one manager of the competition in October. So much so that the 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 d’Astúries and Euskatel, which it later sold to MásMóvil, its ability to buy telecoms and maximize profits in record time. On the other hand, this manager is known as “a shark”, “a leader with an iron fist”. He has shown, with Zegona himself in Euskatel at first, and then in Jazztel, that he is able to squeeze the maximum of a project’s capabilities and make it grow with “aggressive, but not crazy” pricing policies, according to it is described by sources in the sector. And it is expected “that he will do it again with Vodafone”.
This, among other things, means that the effort made last year by the big operators such as Telefónica, Orange and Vodafone itself, to raise prices and slow down the market trend, is history. Any hope that this hyper-competitive market would take a break after the merger between Orange and MásMóvil, (the outcome of which on the part of Brussels has been delayed from February 15 to 22) has remained a simple entelechy.
Digi, the operator that now occupies the fifth position in the ranking in Spain and aspires to the fourth after the merger, did not add to that price increase; it even increased the gigs it offers without changing the rate. This has allowed it, according to the company’s data, to be the operator that won the most portability in January. Specifically, it added 117,200, 55% more. In 2023, it had also led in portability. On the other hand, the loss of customers in the big ones, that of Vodafone mainly was overwhelming, was about 600,000 customers.
Having buried the attempt to raise prices, the fight is fierce again. The virtual operators no longer only deliver it in the low cost field, but also in the field of convergent offers (those that offer fibre, mobile and television packages). Digi, Finetwork, PepePhone… the offers follow, even those from Vodafone Spain.
Its current CEO, Mário Vaz, has turned the boat around despite knowing that he has little time left in command. Vaser manager chosen in March 2023 by the Vodafone Group to replace Colman Deegan as CEO, after the resignation of the latter. He is a man who has to report the parent company of the Vodafone Group, but it has already thrown in the towel in Spain as confirmed by Margherita della Valle herself, CEO of the group, 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 this gives a different perspective”, say sources in the sector. Or what is the same, Vodafone Spain has gone from being the neglected arm of the British national 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 activated a fixed and mobile tariff with 5G for less than 30 euros. But what is more 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 rights to the First and Second Divisions of LaLiga, the UEFA Champions League and the MotoGP championships and F-1 and will be broadcast for the first time since 2022 on Vodafone TV Bars. They will not be available for private customers at the moment. All this without Zegona having arrived.
