Having signed a non-binding agreement to work together last July, the pair have committed to creating a joint fibre-to-the-home (FTTH) network in what could become the largest FibreCo in Europe.
According to a statement, the proposed FibreCo would cover 12.2 million sites across the country, providing FTTH services to over 4.5 million Vodafone Spain and MasOrange customers.
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Eamonn O’Hare, CEO and chair of Zegona, Vodafone Spain’s parent company, said: “Entering this FibreCo partnership with MasOrange, alongside our recently announced agreements with Telefonica, transforms Vodafone Spain’s fixed line strategy.
The combination will give guaranteed access to a future-proof all-fibre national network with attractive economic terms and will enable substantial cost savings across the business.”
The as-yet-unnamed fibre company will see MasOrange hold 50% ownership and Zegona 10%.
The pair are looking for a third-party “financial investor” to join them, which would hold a 40% share in the proposed FibreCo. The companies suggested initial interest from prospective investors was “strong”.
“We expect [the] FibreCo to be a highly valued asset commanding a significant valuation premium,” a Zegona statement reads.
The FibreCo’s formation is subject to regulatory approval, with its completion along with the addition of a third-party investor is expected to be completed by the end of the first half of 2025.
Zegona’s deal with MasOrange adds to the contract it signed with Telefonica to create a new fibre network company.
“Monetising these two FibreCos is expected to deliver very significant Zegona proceeds, generating the ability to reduce leverage and provide a return of capital to shareholders,” O’Hare added.
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