Zegona target Yoigo scraps market-leading 20 GB tariff

Yoigo, Spain's fourth-largest mobile operator that is the subject of takeover talks between UK investor Zegona and existing parent TeliaSonera, has again reduced the data allowance in its market-leading €29 ($33) tariff from 20 GB to 8 GB in a move that will likely further weaken its position on the market.

The company has already withdrawn from the quadruple-play market more than two years after launching bundles of fixed and mobile services, making it the only one of the four mobile network operators that does not provide a multi-service plan.

It is now placing its bets on the mobile-only market, and had reinstated the popular 20 GB smartphone tariff. However, although it still offers some low-cost plans the loss of this market-leading tariff will surely have an adverse impact on its competitive ability.

TeliaSonera, which currently owns 76.6 per cent of Yoigo, confirmed in March it was in exclusive talks with UK-based venture capital firm Zegona over a possible takeover of Yoigo. The Sweden-based operator had previously indicated it was continuing to review its presence in the Spanish market.

In 2014 TeliaSonera noted that its Spanish business remained sub-scale with a market share of around 7 per cent. Yoigo has struggled to make headway on the market despite an aggressive, low-cost approach.

In February, reports said Sweden-based TeliaSonera had commissioned Deutsche Bank to launch the process for a potential sale of the unit, with Zegona and Spanish operator Másmovil Ibercom cited as the main candidates.

Previous reports have suggested that bids were expected to be in the range of €500 million to €600 million. Reuters said Zegona had made the highest offer to buy Yoigo.

Másmovil has been regarded as the more likely contender since a merger of the two companies would create a new fixed-mobile player on the market: the MVNO acquired some of Jazztel's assets when the fixed operator was bought by Orange Spain.

However, Zegona -- which was established by two former Virgin Media executives to execute a 'buy-fix-sell' strategy in the European technology, media and telecommunications (TMT) sector -- also now owns fixed assets in Spain after buying cable operator Telecable there last year.

For more:
- see the Yoigo price plan

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