The joint venture will create a leading operator in the Spanish market in terms of customers, user experience, talent, fibre and mobile coverage, Orange and MasMovil said in a release.
Christel Heydemann, CEO of Orange said: “Today’s announcement is a crucial moment for the future development of the Group in Europe.
“Our proposed Joint Venture with MASMOVIL will create a single, stronger, and more sustainable player in Spain. By joining forces, we can scale, we can innovate, and we can drive investment in Spain for the benefit of consumers and businesses.”
Meinrad Spenger, CEO of MasMovil added: “All good things are worth waiting for! We are thrilled to assume a relevant role in the Spanish telecommunication sector.
“Our exceptional team is committed to forming a unified and distinctive company capable of delivering positive impact and providing a trustful service to the most satisfied clients in Spain.”
Reaction
Kester Mann, director of consumer and connectivity at CCS Insight reacted to the news.
He said: “Approval of the Orange-MasMovil deal will be cheered by the European telecoms sector, which has repeatedly made the case to be allowed to join forces.
“Attention will therefore quickly turn to other potential mergers, notably the tie-up between Vodafone and Three in the UK. Here, both parties will hope that the news represents a shift in position from the region’s regulators as they seek approval to combine.”
Mann says that caution should still remain given the deal will be reviewed by the UK’s Competition and Markets Authority (CMA) whose stubbornness last year to initially block the tie-up between Microsoft and Activision Blizzard shows it won’t be won over easily.
“And while Ofcom has recently softened its stance on mergers since its vehement opposition to the doomed Three-O2 merger several years ago, it will still want to see evidence that a combined Vodafone and Three will lead to better outcomes for customers in a mobile market it believes is currently functioning reasonably well,” Mann added.
“Further, Orange and MasMovil had to offer a package of remedies to get their deal over the line. This comprised spectrum and national roaming access to a rival provider: Digi. If Vodafone and Three are required to do similar, they would be reliant on finding a willing third-party to complete the deal.
“That may not be easy.”
