MasOrange and Vodafone working on mobile network JVMasOrange and Vodafone working on mobile network JV

The Spanish operators are in the initial stages of talks, Expansion reported over the weekend, citing the usual unnamed sources familiar with the situation.

The idea is to create a RANco from both companies' mobile network assets, adopting a model similar to that we have seen a number of times of late with operators merging their fibre infrastructures to create a wholesale operation. Indeed, MasOrange and Vodafone Spain are doing just that on the fixed side, having finally inked their FibreCo deal at the start of the year.

They are actively seeking financial partners for their fibre joint venture, a project they have dubbed Surf, which might have something to do with the fact we are hearing about their mobile plans at this stage too. Surf, or FibreCo, could bring in as much as €4.5 billion, the paper noted, with the split heavily in MasOrange's favour; the market leader could pick up €3.2 billion to Vodafone's €1.3 billion. The telcos have already disclosed that the investor would take a 40% stake, leaving MasOrange with 50% and Vodafone 10%.

We don't have figures for the proposed mobile network deal yet, which doubtless seems like the next logical step to the telcos, but clearly there is an opportunity to bring in a lump sum as well ongoing synergies. Expansion puts those synergies, which would be generated in towers, equipment, transmission and in the workforce, at a fairly loose "multi-millions" of Euros.

The set-up might be a little different than what we are expecting from Surf though. And the future ownership of MasOrange also plays a part.

Orange is keen to buy out its partner Lorca, which is itself owned by international and Spanish investment groups, and take sole control of MasOrange. A deal could comes as soon as early next year, the paper said.

It describes Orange as a "conventional and orthodox" mobile operator, explaining that it will want to keep majority control of its mobile network and retain a stake in excess of the 50% holding it will have in Surf. It would also look to consolidate the debt of the RAB business. There is still room for an investor to come in, given that investment group Zegona would be happy with an asset-light approach. But the implication is that any investor would be able to pick up less of RANco than they would Surf.

This proposed RANco is just one of a number of options in front of Vodafone in Spain, Expansion points out. It could equally choose to try to extend its existing mobile network sharing deal with MasOrange that currently only covers conurbations with fewer than 175,000 inhabitants. Or it could seek to do some sort of deal with Telefonica in the bigger cities, although any move to bring in an investor there would be unlikely to find favour with the incumbent, which would not want to part with its mobile network.

Therefore, a deal with MasOrange could well be the best move for Vodafone, which serves just over 20% of Spanish mobile connections, keen as it is to bring its costs down.

Of course, operators reducing costs has a knock-on effect elsewhere in the market. In particular, the towers companies are at risk, which could lead to more consolidation there. Expansion points to talk of a tie-up between Cellnex and Orange's Totem, something that could play into the RANco discussions for the French operator.

Ultimately, this deal will only add to the tangle of inter-operator relationships in Spain and therefore will not be an easy one to hammer out, should to get to that point, no matter what the financial benefit.

And the authorities would give it a very close look too, coming less than a year after Orange and MasMovil closed their merger, a process that took years to clear regulatory hurdles. It's an interesting market development, but by no means a done deal.