Spain: Yoigo – MasMovil merger will mean sharp blow to telecom sector, analyst finds

MásMóvil and Yoigo’s imminent merger is expected to cause a 4% drop in incomes for the Spanish telecommunications sector. This is the conclusion of tech consulting firm Altran’s report, which adds that the new entity is likely to “find it difficult” to compete against the three giants of Spain’s telecomm sector- Movistar, Vodafone and Orange. Altran’s report marks the move as an “interesting and special case” to investigate, prompting it to develop two alternate scenarios for Spain’s telecomm markets over the next year, varying on whether the merger goes ahead or not.

The report expects income for the telecomm sector in 2016 to total 10.74 billion euros should the merger go through – a 3% drop on the 11.12 billion euros expected should the companies remain separate. Likewise, incomes for 2017 would be expected to fall a further 4%, from 11.1 billion should the merger fail to 10.6 billion if the two companies complete their operation.

“The acqusition increases MasMovil’s market power and visibility, which would lead to a new round of intense competition, with expected downward effects for unit prices” states the report.

Full Content: El Economista

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