MasOrange, Vodafone Spain and GIC create Spain’s largest fibre company as ‘SuperNetco’ model gains traction
Spain’s fixed broadband market took another significant step toward consolidation this week, with MasOrange and Vodafone Spain – now owned by UK-based investment firm Zegona – announcing the creation of the country’s largest fibre network company in partnership with Singapore’s sovereign wealth fund, GIC.
The new joint venture, provisionally codenamed “Surf”, will own and operate a national fibre-to-the-home (FTTH) network covering around 12 million homes and 5 million customers. Under the agreement, MasOrange will hold a 58% stake, Vodafone Spain 17% and GIC 25%.
The deal represents a further evolution of Spain’s “SuperNetco” model, a term used by strategy consultancy Nae to describe an emerging structure in which operators spin off fibre assets into infrastructure-heavy joint ventures to protect core footprints and reduce debt.
“This is the last movement consolidating the Spanish SuperNetco Iron Triangle,” said Joaquín Guerrero, Director at Nae. “Fortifying and defending the core footprint is the key idea here.”
The other two sides of the triangle are Telefónica’s Bluevia, backed by Vauban Infrastructure Partners and Crédit Agricole, and Onivia, now majority-owned by Ardian and supporting Digi’s national expansion. Together with the newly formed Surf venture from MasOrange, Vodafone Spain and GIC, these entities represent a strategic shift in Spain’s fibre market toward infrastructure-focused joint ventures that allow operators to monetise assets while defending core retail positions.
According to Guerrero, the Surf Netco will not operate independently in a commercial sense. “All wholesale relationships will be managed by the telco shareholders – MasOrange and Vodafone Spain – so no real change in market dynamics, yet,” he said.
A strategic deleveraging move
The transaction is also seen as a financial manoeuvre that enables both telcos to deleverage, a prerequisite for their long-term strategic plans. Guerrero explained that MasOrange’s owners – private equity firm KKR and other investors – are weighing either a return to full control by Orange Group or a future public listing.
“In either case, deleveraging was mandatory. The target was 3.5x EBITDA – this operation will achieve 2.75x,” he said. “For Vodafone and its new owner Zegona, the logic is similar, though they don’t yet have a clear buyer lined up.”
He also noted that while the original plan was to sell up to 40% of the fibre company, the final terms were more conservative – a sign that FTTH asset attractiveness may have peaked.
Delayering continues
Nae has previously highlighted how the Spanish market has already undergone significant delayering, with multiple overlapping fibre networks and a growing number of wholesale agreements. Yet the market remains competitive, with challengers such as Digi and smaller regional “operadores de cercanía” continuing to grow.
“Consolidation forces are still in place and we will see more movements in the future until our end-game vision: two or three almost-national FTTH networks,” said Guerrero. “The industry is at an inflection point.”
In a further twist of timing, Spain’s regulator, the CNMC, this week announced it would fully deregulate FTTH shared access, potentially removing one of the last constraints on large-scale fibre consolidation.
While the Surf joint venture creates a national fibre powerhouse, it is more about entrenching existing infrastructure than expanding it, according to Nae’s market model. The firm points to a landscape where incumbents consolidate to preserve coverage and share costs, while newer players like Digi partner with wholesale platforms such as Onivia to extend reach without overbuilding.
“This deal doesn’t change the market overnight,” Guerrero said. “But it cements the structure of a future market where just a few national players own and operate the majority of Spain’s fibre.”
More on the deal
As part of the transaction, MasOrange will purchase Conexus Networks, the wholesale FTTH access provider in the North of Spain and contribute it to so-called – and provisional – Surf. As committed by MasOrange, €3.2 billion net proceeds from Surf’s transaction will be fully allocated to debt repayment at MasOrange level ensuring strong deleveraging in line with the Group’s tightened mid-term leverage target of 2.75x, as FibreCo will be fully deconsolidated from MasOrange accounts.
Surf will have a very efficient capital structure with over €5bn of net debt. The majority of the debt raised will be investment grade, both underscoring its robust credit profile and positive outlook for the Spanish market. Circa 20 global banks have participated in the financing, demonstrating phenomenal support from lenders’ pool.
“GIC was chosen following a competitive process involving nearly 20 interested investors. This venture will provide our customers with the best premium FTTH connectivity and assure future technology upgrades”, said MasOrange CEO Meinrad Spenger.
Vodafone Spain first executive José Miguel García said “We continue to take steps in our strategy to transform Vodafone Spain into a more competitive, efficient and growing company. This agreement is a relevant milestone in our plan, since it will guarantee our customers access to fibre optic networks and better service.”
GIC chief investment officer, infrastructure, Boon Chin Hau said: “We look forward to partnering with MasOrange and Vodafone Spain to create Spain’s largest FibreCo. Spain is one of the most advanced European countries in terms of its fibre to the home rollout, however there remains significant fixed broadband penetration growth potential.”
He added: “The FibreCo has been designed to offer best in class service quality to customers whilst offering robust core infrastructure characteristics to investors.”
