In a significant development, Orange and MASMOVIL have successfully obtained clearance from the European Commission for their joint venture in Spain, marking a pivotal moment in the telecom landscape. The 50-50 joint venture, named LORCA JVCO, will be co-controlled by Orange Spain and MASMOVIL, aiming to create a telecom powerhouse that can efficiently invest in 5G and fiber infrastructure, ultimately benefiting consumers and businesses across Spain.
Creating a Telecom Powerhouse:
The joint venture is set to serve an extensive customer base, combining over 7.3 million fixed customers, more than 30 million mobile service users, and 2.2 million TV customers. This strategic move will consolidate their resources and expertise to offer improved services and drive innovation in the rapidly evolving telecom industry.
Nationwide Coverage and Infrastructure Investment:
With a focus on nationwide coverage, the combined operator will leverage its network and IT assets to provide extensive coverage in Fiber-to-the-Home (FTTH) and 4G/5G services. This is a significant step towards meeting the growing demand for high-speed connectivity and advancing Spain’s digital infrastructure.
Financial Projections:
The financial outlook of the venture is robust, with projected revenues exceeding EUR 7.4 billion, an EBITDAaL of over EUR 2.3 billion, and an enterprise value of EUR 18.6 billion. These projections indicate a financially strong and sustainable entity that can fuel further investments in cutting-edge technologies.
Spectrum Divestment for Regulatory Compliance:
As part of the merger, the companies are set to divest 60 MHz of spectrum assets to Digi, subject to approval from the Spanish Government. Additionally, an optional national roaming agreement at market conditions will be proposed as part of the regulatory compliance.
Strategic Importance and Future Outlook:
Orange emphasized the significance of this joint venture, stating that it is a crucial moment for the future development of the Group in Europe. The companies expect to complete the transaction by the end of the first quarter in 2024, subject to meeting all closing conditions. Until then, Orange and MASMOVIL will continue their independent operations.
MASMOVIL expressed its excitement about assuming a relevant role in the Spanish telecommunication sector, underscoring the positive impact this venture will have on the industry.
