Spanish MNO Masmovil sees opportunities in converged offers

Friday 5 May 2017 | 12:33 CET | Background

During the MVNO congres in Nice Masmovil’s CSO (Chief Strategy Officer) Pablo Freire discussed how the MVNO became the fourth national carrier in Spain. The three main milestones of this change were the acquisition of fixed assets as part of the Orange/Jazztel merger conditions, the acquisition of MVNO Pepephone, followed by the acquisition of the fourth MNO in Spain Yoigo from TeliaSonera. He explains it as being at the right moment in the right place in a very competitive and consolidating landscape. 

According to the CSO Masmovil currently has more than 4.5 million mobile users and a small but fast-growing fixed base. He elaborates on having the right business plan in place with a multi-brand strategy (Masmovil, Yoigo and Pepephone), a smart combination of owned and third party networks, significant merger synergies in order to optimise networks cost and cross selling posibilities and an ‘amazing team’. In a conversation with Telecompaper Freire said Masmovil is considering the possibility of launching quadplay before the end of this year to counteract competition but it will not be its main focus. 

In its recent results year end 2016 the company provided guidance for 2017: 

  • a total combined net increase in fixed broadband lines and post-paid mobile lines of 500k, 
  •  growth of more than 10% vs proforma service revenues of EUR 838 mn in 2016 
  •  and reaching a EBITDA of more than EUR 200mn up from EUR 119 mn (Proforma) in 2016. 

Market dynamics which will provide tailwind for this guidance are stipulated as market growth, price increases, convergence and OTT expansion. According to the company Spain’s traditional telecom operators have continued to increase prices following the “more for more” strategy (more mobile data or services for a higher monthly fee). In fact, the telco CPI is now double the general CPI. This has resulted in market recovery. With regards to consumer demand, it will continue to drive the growth in the Spanish broadband market, which reached a total of 11.6 million residential accesses by the end of the year (+5.2% versus 2015). 

In terms of convergence Masmovil says that the increasing weight of convergent offers - around 70 percent of the Spanish households subscribe to a mobile/fixed bundle - highlights the opportunity for the Group. While the Group has already a solid position in the mobile market, the lack of fixed broadband infrastructure was a deterrent to growth in the past. After the acquisition of the FTTH assets under the remedies of the Orange-Jazztel transaction and the global agreement with Orange, which includes wholesale access to Orange's FTTH footprint in Spain, the Group offers now convergent bundles under all 3 major brands. With regards to OTT TV expansion the company says ‘the growing number of “over the top” platforms change the way how video content is consumed, which impacts the telco’s 4P business model (voice, mobile, fixed broadband and video content). According to the regulator CNMC more than 10% of the users of audiovisual content chose to contract OTT services (+35% vs 2015), and the company expects this share to continue growing. Therefore, the Group is defining its TV strategy, which is expected to go live before the end of the year’.

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

::: add a comment