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The deal follows Zegona’s €5 billion purchase of Vodafone Spain last June
Zegona Communications has announced that Vodafone Spain and MasOrange will form a new fibre network joint venture, dubbed FibreCo.
FibreCo will combine the two companies’ fibre-to-the-home (FTTH) networks, reaching roughly 12.2 million premises across Spain. This, the partners say, will create the largest FTTH network in Europe.
FibreCo will use existing infrastructure, with nearly 40% of the combined FTTH network already in use by 4.5 million customers. It plans to deploy the latest technologies, such as XGS-PON, to improve service quality. Vodafone Spain will use FibreCo to deliver services to both retail and wholesale customers.
FibreCo is expected to generate approximately €480 million in annual EBITDA within three years.
A third-party investor is also being sought to join the venture, with the proposition already reportedly receiving strong interest. Under the proposed structure, MasOrange will retain 50% ownership, Zegona will hold 10%, and the third-party investor will take a 40% stake.
“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. 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,” said Eamonn O’Hare, Chairman and CEO of Zegona in a press release.
The initiative follows Zegona’s recent agreement with Telefónica to establish another fibre network in Spain and renew wholesale access terms. Combined, these projects represent a significant overhaul of Vodafone Spain’s fixed-line strategy, enabling full FTTH coverage across the country and achieving cost efficiencies.
The deal is subject to regulatory approval and is expected to close by mid-2025, alongside the onboarding of a third-party investor.
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