Vodafone Spain has begun a strategic review after a year marked by sales pressure and price competition from low-cost players. The Spanish subsidiary reported revenues of EUR 3,907 million for the last fiscal year, a decline of about 6.5% driven by softer activity in retail services and devices and a continued loss of customers. The group remains open to all options, including partial or full divestment, as it seeks to adapt to a difficult market environment and maximize shareholder value.
New Vodafone Group CEO Margherita Della Valle indicated that it is premature to decide the exact path for the Spanish business. She did, however, acknowledge the potential for structural changes within the Spanish unit and left the door open to various developments. The aim is to handle the market with a refreshed approach that supports the goal of increasing value for shareholders, as reported by Reuters. The market in Spain is regarded as very challenging, and the company intends to steer the business differently while the strategic review unfolds.
There is growing interest from mutual funds and other players in the telecommunications sector to gain exposure to Vodafone Spain, according to Bloomberg. The discussions include the possibility of a strategic alliance to share fiber optic networks if ONO decides to discontinue the cable network inherited from its acquisition.
The CEO has outlined plans to restart the business and has conducted a substantial review of the group’s operations and structures. Vodafone Spain is currently undergoing a strategic review, as a broader restructuring is prepared for the German subsidiary. Worldwide, the company is pursuing a plan that may affect roughly 11,000 jobs over three years, signaling a broader effort to streamline costs and improve competitiveness across the group.
job decline
Vodafone Spain has long faced intense competition in the national market, particularly from low-cost providers, which has contributed to a steady revenue decline. Revenue from services reached EUR 3,514 million in the last fiscal year, a 5.4% drop from the previous year. This reflects the ongoing pressure in core telecommunications activities as consumers shift to value-based plans and bundled services.
Nevertheless, the company managed to slow the decline in recent quarters, with service sales down 3.7% in the latest period after steeper drops of 8.7% in the third quarter and 4.5% in the second quarter. The price environment, along with inflation, has prompted rate adjustments to support demand for digital services. Vodafone Spain’s operating earnings remained positive at EUR 947 million, slipping 1.1% due to lower sales and higher energy costs.
loss of customers
Mobile contract customers ended the year at about 11.1 million, down from the prior period by 36,000. The Lowi low-cost brand continues to grow, while the flagship Vodafone brand experienced churn linked to the broader market shifts. During the year, 123,000 connections were lost from temporary business SIM cards used by schools and universities during the pandemic.
Fixed broadband customers fell by 121,000 to 2.9 million, and television customers decreased by 56,000 to 1.5 million. Connected Internet of Things lines rose to 5 million, representing roughly 40% of the sector’s share.
Since April, a new CEO has been tasked with restarting Vodafone Spain. The leader is Mário Vaz, who previously headed Vodafone Portugal since 2012 and has more than three decades of experience in the group. Vaz is widely seen as someone who can apply the group’s successful Portuguese market strategies to Spain, a market characterized by convergent pricing, bundled services, and intense competition from new low-cost operators.
He has called for organizational simplification to regain competitiveness. The parent company reported a stronger net profit for the year, helped by extraordinary revenue from the partial sale of Towers Vantage Towers, as well as a modest overall revenue increase to EUR 45.706 billion, in line with the prior year. This reflects the broader company’s efforts to balance profitability with growth in core services and new ventures.