Bankinter | Telefónica is buying frequencies in the 3.5 GHz band , which is the standard for the bulk of 5G traffic, from Masorange. Both companies have submitted the formal request for the transfer to the Ministry of Digital Transformation.
Opinion of Bankinter’s analysis team: The sale of frequencies by Masorange falls under the “remedies” or conditions imposed by the EC for the authorisation of the merger between Orange and Masmóvil. This is a positive transaction, albeit a small one for Telefónica. The last reference price for this spectrum in the 2021 auction set a cost of €21 million for each 10 MHz block, which would represent a value of €63 million.
If the deal goes through, the 5G frequency market will be fairly evenly balanced between the two largest operators in Spain. Masorange would end up with 140 MHz in the 3.5 GHz band and Telefónica with 130 MHz, followed by Vodafone with 90 MHz and Digi with 20 MHz.
The deal is interesting for Telefónica as it is the company with the most corporate customers and large accounts, with the highest demands for performance, capacity and speed. For this reason, Telefónica is leading the deployment of the 3.5 GHz band network with 4,000 antennas by the end of 2023 compared to 2,000 for Masorange and 2,000 for Vodafone.
This agreement joins the two companies’ recent agreement to share 3.5 million fibre optic accesses. The agreements reflect a more rational competitive environment, with the main operators willing to share networks and avoid new duplications in fibre optic networks, thus moderating the sector’s investment needs.
