Orange balks at Telefónica/Yoigo LTE network-sharing deal in Spain

Orange in Spain blasted as unfair a new LTE network-sharing agreement between Telefónica and TeliaSonera's Yoigo. Reuters reported that Orange asked Spanish competition authorities to look into the deal, but that Spain's telecoms regulator did not immediately respond to a request for comment.

Orange's resistance to the new transaction doesn't come as much of a surprise; the deal between Yoigo and Telefónica, operating under the Movistar brand in Spain, gives both operators a much more solid position in the hotly contested market. Telefónica is Spain's largest mobile operator, while Yoigo is the country's smallest. The companies hope to have their shared network operational by the fourth quarter.

For Yoigo, the transaction gives it the ability to offer Telefónica's fibre broadband and TV services, thus countering the quad-play offerings from its larger rivals. (The deal also extends to 2016 Yoigo's ability to sell Telefónica's countrywide 2G and 3G services, extending a teaming between the companies first signed in 2008.) Yoigo counts around 3.2 million subscribers, or 6.7 per cent of the market, and launched LTE earlier this year. The company expects to cover 48 per cent of the Spanish population with LTE by the end of the year.

For Telefónica, the deal finally gives it the chance to offer 4G mobile services--Telefónica is the only operator in Spain that does not offer LTE, mainly because the spectrum it intends to use for the service remains encumbered with TV broadcasters. Telefónica has said, however, that it may launch its own LTE network at some point in the future, comments that indicate Yoigo's favored position with Telefónica could be finite.

As part of the tie-up between Telefónica and Yoigo, the companies agreed to sell their towers to Spanish conglomerate Abertis for €385 million ($511 million).

Through the deal, Yoigo is now in a better position to compete against the likes of Orange, Vodafone, Jazztel and ONO in Spain.

For more:
- see this Reuters article
- see this Telecompaper article
- see this ZDNet article

Related Articles:
Telefónica signs fiber sharing pact with Vodafone, Orange in Spain
Yoigo becomes Spain's third LTE operator
Orange Spain unveils LTE tariffs as price war deepens
Vodafone Spain revs up LTE launch to beat rivals
Orange looks set to beat Yoigo by days in Spain's LTE race
Yoigo beats rivals as first to offer LTE in Spain

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