Aggressive price wars, dense fiber coverage, and restless investors have pushed Spain’s telecom sector to the point where strategy must bend or break, and Zegona chose to bend hard by retooling Vodafone Spain into a service-led player that rents scale instead of owning it. Since acquiring the operator in May 2024, management has treated fixed infrastructure not as a trophy but as a lever, turning to fiber monetization, joint ventures, and strict cost removal to steady cash generation. The gambit is simple in concept but demanding in execution: decouple ownership from access, swap capex for contracts, and use upfront proceeds to strengthen the balance sheet while funding a more focused commercial push. The early scorecard showed momentum, yet the competitive bar in Spain remained high, which made durable execution just as important as dealmaking.
the asset-light playbook and the deals
The operating thesis hinges on guaranteed fiber access under attractive terms without the drag of full ownership, an approach designed to lower capital intensity and smooth cash flows. By holding minority stakes while securing long-term access, Vodafone Spain aims to preserve national reach, align costs with demand, and channel freed-up capital into growth and simplification. FiberPass and PremiumFiber form the backbone of this model. FiberPass, created in March from a carve-out of Telefónica’s FTTH, spans 3.7 million premises and serves nearly 1.4 million customers. AXA IM Alts agreed to buy 40% of the vehicle; upon closing, Telefónica would hold 55% and Vodafone Spain 5%, with roughly €400 million of cash proceeds expected to flow to Vodafone Spain in Q1 2026.
PremiumFiber complements that access with breadth and customer scale. Structured alongside MásOrange as a separate platform, the venture will pool about 12 million premises and nearly 5 million retail customers, providing a national footprint that reduces overlap and duplication. In August, GIC agreed to take a 25% stake, leaving MásOrange with 58% and Vodafone Spain with 17% at closing, which is expected by year-end. Together, the two fiber vehicles are expected to deliver €1.8 billion in upfront proceeds to Vodafone Spain, while locking in wholesale access for the long term. Management pitches this pairing as “future-proof” because it marries extensive coverage with a lighter cost base, shifting the operator toward a variable model that tracks demand and away from the heavy fixed costs of legacy ownership.
performance, market forces, and valuation markers
The initial financial readout offered support for the pivot. For the six months ended September 30, revenue reached €1.8 billion versus €1.2 billion a year earlier, while the net loss narrowed sharply to €28 million from €307 million. Customer trends also turned a corner: broadband lines rose by 24,000 to 2.58 million, and contract mobile subscribers grew by 93,000 to 10.15 million. The return to customer growth flagged in July suggested that sharper execution and improved fiber economics were gaining traction. Management still cautioned about period comparability given the ownership change, but the direction of travel aligned with the core aim—lower capex, lower opex, and steadier cash generation supported by broad fiber reach.
The strategic calculus plays out against one of Europe’s toughest battlegrounds. The MásMóvil–Orange combination into MásOrange heightened price pressure and promotional churn, while EU remedies bolstered Digi Spain as a strengthened fourth MNO. Talk of a Digi IPO signaled continued investor appetite for Spanish telecom assets, even as the market’s intensity tested operators’ margins. Zegona’s response centered on fundamentals rather than speculative consolidation: prioritize access economics, manage churn with value propositions, and keep the balance sheet “fit for purpose.” On valuation, management cited a 753% rise in Zegona’s share price since announcing the acquisition in October 2023 and marked Vodafone Spain’s enterprise value at €14.7 billion, composed of €11.1 billion in equity and €3.6 billion in net debt.
what to watch next
The playbook’s durability would have depended on timely closings, clean integration of access frameworks, and the translation of lower capital intensity into tangible margin gains. PremiumFiber’s stake sale to GIC was slated to close by year-end, while the FiberPass transaction targeted Q1 2026, putting sequencing and regulatory clearance front and center. Commercially, the task was to turn broader fiber access into stickier bundles, segment-driven pricing, and churn control in a market where promotional activity remained relentless. Execution risk lingered, but the architecture—asset access over ownership—set the stage for variable costs, lower maintenance capex, and a steadier path to cash generation.
Capital allocation would have served as the other proving ground. With €1.8 billion of expected proceeds, the plan contemplated meaningful returns to equity and debt holders while retaining flexibility to invest in product, distribution, and IT simplification. The next steps were clear: finalize the deals, embed the wholesale terms, extract opex and capex savings, and defend share against MásOrange and Digi with differentiated service and disciplined pricing. If the model held, Vodafone Spain would have competed on agility and cost position rather than scale alone, and the turnaround would have advanced from promising indicators to sustained performance under a leaner, access-led structure.
