TeliaSonera CEO Johan Dennelind has described the small market share of its Spanish mobile unit, Yoigo, as not sustainable, adding: “Long term I think we need to see Spain as up or out.”
The Spanish unit is also not included in TeliaSonera’s new…
TeliaSonera CEO Johan Dennelind has described the small market share of its Spanish mobile unit, Yoigo, as not sustainable, adding: “Long term I think we need to see Spain as up or out.”
The Spanish unit is also not included in TeliaSonera’s new “three pillar” strategy, leading to speculation that a sale was now back on the agenda.
Nomura analyst James Britton said in a memo that, after weak operating figures in Spain this quarter, the market “will view the omission of Spain from the strategic statement as tantamount to putting the asset up for sale”.
In a press briefing to discuss TeliaSonera’s Q1 results, Dennelind said it was difficult to view Yoigo’s 7% mobile market share as viable in a convergent market with three big operators going fixed and mobile.
“We need to find the path to a sustainable position in Spain. If that’s not possible organically then other measures need to be considered,” Dennelind said.
TeliaSonera’s new strategy focuses on strengthening its Nordic and Baltic units, monetising data in Eurasia, and examining revenue opportunities in adjacent sectors.
Dennelind also said he foresees more consolidation, and added he had encountered “a completely different appetite and willingness to accept consolidation” when meeting with European regulators. There was a real emphasis on network quality from the regulators’ point of view.
Vodafone hints interest
One potential acquirer could be British telco Vodafone. It recently bought Spanish cableco Ono to add to its mobile unit in the country, which is second in size only to incumbent Telefonica.
Vodafone CEO Vittorio Colao has said Yoigo would be something the telco was obliged to look at. However, he said first the European Commission would have to make its stance clear on consolidation deals – in Ireland and Germany where network operators could fall from four to three – before Vodafone could think about anything further.
Dennelind was similarly-minded. Speaking generally he said the market was waiting for the outcome of those decisions before progressing with consolidation.
TeliaSonera began a process in 2012 to sell Yoigo but the process was abandoned in early 2013 due to issues over valuation. Orange had shown interest in the asset at the time and last month reportedly mandated BofA Merrill Lynch to advise on its strategy in Spain, where it operates mobile services.
Orange has subsequently been linked with a bid for fixed-line business Jazztel, as well as Yoigo.
