British investment firm Zegona announced on Tuesday that it has agreed to acquire Vodafone Spain for five billion euros. The deal is planned to close in the first quarter of 2024 after obtaining clearance from the government under the Foreign Investment Law. Vodafone remains the third-largest telecom operator in Spain with about 11.4 million mobile customers, 3 million broadband customers, and 1.5 million television subscribers.
1. What about the Vodafone brand?
The Vodafone name will stay the same. The British fund reached an agreement to protect the brand for up to ten years. Vodafone will also remain present in the Spanish market at all times. Up to this point Vodafone Group has operated in Spain, and Zegona will act as its guardian for the coming years. The aim is not to replace the premium Vodafone brand or the low cost Lowi brand but to improve the company’s current performance, explained Eamonn O’Hare, Zegona’s CEO, at a press conference. The plan focuses on strengthening existing branding without erasing the value of the current market positions.
2. Will there be any changes then?
With the details still unfolding, Zegona’s trajectory after the announcement highlights two potential areas for change: Lowi and wholesale services. The intention is to strengthen Lowi so it can rival Digi Vodafone’s budget brand, which currently serves about 5.7 million customers and roughly 1.5 million additional users. The strategy involves enhancing the value proposition with offers that include more benefits, such as expanded 5G coverage and improved television content options. Unlike Digi Vodafone, Lowi has not been aggressively marketed in the past, and Zegona aims to refresh its appeal.
3. Will prices increase?
Forecasting pricing changes remains challenging given the current inflationary environment. Zegona’s focus is to grow revenue through smarter execution and greater efficiency, trimming elements that slow growth while expanding high value activities. José Miguel García, the executive who would lead the company, previously held top roles in Euskaltel and Virgin Telco, where an à la carte approach to services was explored at low costs. The shift aims to address a natural market demand for affordability while preserving service quality and value. The commentary from García emphasizes that the market gradually shifted toward low cost offerings after a period of rigid bundles, and there is room to fill that gap without compromising service excellence.
4. What about at the wholesale level?
On the wholesale front, the plan centers on increasing revenue from network services. The Spanish market is dynamic, and Vodafone Spain is seen as having strong network assets that can be leveraged more efficiently. The aim is to avoid underutilization by maximizing capacity and traffic flow. The executives caution that a specific blueprint has not yet been disclosed, but several options exist to boost value, attract more traffic, and drive greater market responsiveness. The focus is on optimizing wholesale operations to compete more effectively and deliver a stronger overall performance for the business.