The rumour mill is churning at maximum speed as Vodafone Spain is reportedly considering a sale of its fixed network for €1.2 billion.
It would appear to be an unusual move. With many national business units shifting towards a convergence business model, divesting its fixed networks assets would take the Spanish unit the other direction.
According to Spanish news site Expansion, the business is currently undergoing a restructure, owing to difficult market conditions, and the sale of the fixed network could certainly add some much-needed cash into operations.
“Currently there is no project that is working on the complete sale of the network proactively, although possibilities are always being analysed and studied to find efficiencies and improve the profitability provided by assets, such as the possible partial sale,” a spokesperson said.
The Spanish market is a tricky one to master currently. After the management team deemed renewing TV rights for the Champions League and La Liga football competitions were deemed unprofitable, Vodafone Spain lost 71,000 TV customers almost immediately, though the mobile business did grow gradually over the course of 2018.
Looking at the most recent financial results, alongside Italy, Spain is proving to be the problem child of Vodafone’s European family. Year-on-year revenues declined by 9.3% for the second quarter of 2019, though tariffs have been overhauled to create a more competitive proposition.
However, alongside the new data tariffs, Vodafone’s rivals launched their own promotions which appear to be much more attractive. Over the three-month period, Vodafone lost two corporate accounts, 158,000 postpaid mobile subscribers, 49,000 fixed broadband customers and 24,000 TV customers.
Although these rumours are far from a sign anything will actually happen, we’ll wait for a potential buyer to make themselves known before investing too much energy, it does seem to be a strange move. Vodafone does of course need cash ASAP, though if it still wants to persist with the convergence strategy in Spain it would have to enter into a leasing agreement with one of the other network owners should the sale go through. It does appear to be somewhat short-sighted.