TeliaSonera in exclusive talks with Zegona to sell Spanish MNO Yoigo

Swedish operator group TeliaSonera and telecoms investment group Zegona have both confirmed they’re in exclusive talks over the sale of Spanish MNO Yoigo.

TeliaSonera has been in consolidation mode ever since the EC blocked its JV with Telenor in Denmark and it concluded its Eurasian operations were more hassle than they were worth. According to Ovum’s WCIS service Yoigo is a distant fourth among Spanish MNOs with a 6% share of subscribers, which itself represents a decline from its 2014 peak of 8%.

“As previously reported, TeliaSonera is reviewing its future presence in the Spanish market,” said a TeliaSonera announcement. “Today Zegona Communications, which is listed on the London stock exchange, has issued a statement that it is in exclusive talks with TeliaSonera over a possible offer for TeliaSonera’s Spanish operations Yoigo. TeliaSonera confirms that it is in exclusive talks with Zegona.”

Zegona is a publicly traded company formed last year by former Virgin Media execs to exploit opportunities in the European telecoms and media space. It acquired Spanish cableco Telecable in August 2015 and clearly sees an opportunity to combine it with Yoigo to create a multiplay challenger in the Spanish market.

“The Board of Zegona Communications plc notes the recent press speculation concerning a possible acquisition of Yoigo, the Spanish mobile telecommunications business,” said the Zegona statement. “Zegona can confirm it has entered into an exclusivity agreement with TeliaSonera, the parent company of Yoigo in relation to Yoigo’s acquisition.” The rest of its statement covered the usual verbose caveats that amount to ‘nothing’s set in stone yet’.

The current consensus in telecoms is that multiplay is the way forward, so Zegona’s strategy seems sound in that respect. The Spanish mobile market is dominated by multinationals Telefónica, Vodafone and Orange, so there may be some latent demand for an agile challenger. Alternatively Zegona’s ultimate exit strategy could be to fatten up its offering to such a point that it becomes a takeover target itself for Vodafone or Orange, both of which are well behind leader Telefónica in mobile subscriber share.