Spanish steps towards the mobile consolidation of Europe

This article is an on-site version of our #techFT newsletter and is typically only available with a Premium subscription. Are you currently a standard subscriber? Click here to upgrade your subscription to Premium. Not a subscriber yet? You can hire a Premium subscription here

Three is the magic number for European telecommunications operators, and Spain is leading a new round of consolidation of the fragmented market.

Orange and MasMovil said on Tuesday that they were in exclusive talks to combine their businesses in Spain through a €19.6 billion joint venture. If they reach an agreement and the regulators approve it, the Spanish players would be reduced from four to three.

Currently, the largest operator in Spain is Telefónica, followed by Orange and Vodafone. MasMovil, the fourth largest operator, went private in 2020 following a leveraged buyout by private equity groups KKR, Providence Equity Partners and Cinven.

Anna Gross reports The news will be perceived as a blow to Vodafone, which had also been talking to parties in Spain about possible deals for its Spanish business.

Vodafone Chief Executive Nick Read has been under pressure from activist investor Cevian Capital to pursue deals more aggressively. He has identified Spain, Italy and the UK as countries ripe for a reduction from four to three, and Portugal from three to two operators. Orange has said that the French market would benefit from a move from four to three.

The European Commission has seen things differently, believing that the current level of competition is necessary to keep prices low and give consumers more choice. Operators say they need to increase their profits to justify big investments in fiber broadband and 5G. They have been selling their tower businesses to raise more cash lately, but they also see consolidation as key.

“The [Spanish] The deal is the first major test of regulators’ appetite for consolidation in the market since the pandemic,” says Kester Mann of telecoms research firm CCS Insight. “The industry has pinned its hopes on a more lenient stance as the value of high-quality connectivity has become increasingly apparent.”

However, he cannot count on the commission to soften its criteria, as the EU itself makes billions of euros available for network upgrades. And any attempts at consolidation may be delayed for years due to objections from regulators. The industry only has to look at efforts to merge Three and O2 in the UK in 2016. An EU bloc in the deal was only struck down by a European court four years later, by which time, the deal was dead on all sides. modes.

Internet of (five) things

1. Google buys a security company
Google to buy US cybersecurity company Mandiant for $5.4 billion as it looks to bolster its cloud computing business, making it the tech giant’s second-biggest acquisition.

2. Disney plans a makeover for ESPN
Cable sports network ESPN has been a major profit driver for Walt Disney, thanks to strong subscriber growth, high advertising rates and industry-leading rates charged to cable providers. But its subscriber count has been steadily declining as audiences have migrated to streaming services and it’s now turning to sports betting to increase revenue.

Average Subscribers (mn) column chart showing that ESPN's subscriber count has declined in the streaming era

3. Amazon Web Services ‘painful’ outages
The head of AWS tells us about the latest falls in its cloud computing service were “incredibly painful” but insists its rapid growth would not lead to broader disruption. Its infrastructure experienced two major failures late last year, including one december break at its data center in Northern Virginia.

daily bulletin

#techFT brings you news, commentary and analysis on the big companies, technologies and issues that shape this fast-moving sector of specialists from around the world. Click here to receive #techFT in your inbox.

4. Glowing tigers
Several hedge funds spawned by Julian Robertson’s investment firm Tiger Management have suffered heavy losses in recent months after big falls in some US technology stocks. A group of so-called “Tiger Cubs” that includes Chase Coleman’s $90bn Tiger Global, Philippe Laffont’s Coatue Management and Glen Kacher’s Light Street Capital have backed a similar cohort of companies including Peloton Interactive, Zoom and Block, according to FT analysis.

5. International Women’s Day: the femtech revolution
Nikkei Asia has been looking at the different fields of femtech innovation, most of them related to healthcare. For example, Singapore’s EloCare is developing a wearable product that monitors a woman’s body temperature, blood pressure, and other variables to provide “personalized menopausal data management.” The goal is for users to be able to monitor their hot flashes and other symptoms, then see a doctor armed with data about her condition, in the hope of receiving a more accurate diagnosis and proper treatment.

Tech tools: Apple’s new iPhone SE

Apple’s “Peek Performance” event is currently underway and the first hardware announcement is that the iPhone 13 is now available at two new shades of green! Yes, try to contain your excitement. Then, the new iPhone SE more interestingly, the most affordable iPhone will now have the faster A15 Bionic chip from the iPhone 13. It will be available in three colors: Midnight, Starlight and [Product] Red — from $429. The 4.7-inch retina display is protected by stronger glass, there’s 5G connectivity, and the A15 processor means better battery life and computational photography to enhance the 12MP camera. More from the event at Wednesday’s #techFT.

city ​​newsletter — Our pre-market update and comment. Sign up here

#fintechFT — The latest on the most pressing issues in the tech industry. Sign up here

Leave a Reply

Your email address will not be published. Required fields are marked *