Reuters: Technology News: Telefonica, Yoigo to share 4G, broadband in Spain

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Telefonica, Yoigo to share 4G, broadband in Spain Aug 1st 2013, 13:16 MADRID/STOCKHOLM | Thu Aug 1, 2013 9:16am EDT MADRID/STOCKHOLM (Reuters) - Spain's biggest telecoms operator Telefonica (TEF.MC) signed a deal with No. 4 provider Yoigo (TLSN.ST) on Thursday allowing it to use its rival's superfast mobile internet frequencies in exchange for access to its broadband assets. Telefonica, the only operator in Spain that does not currently provide 4G services, will have full use of Yoigo's superfast spectrum, while the smaller player will now be able to compete in the attractive market of bundling fixed-line and mobile telephone service. The agreement is expected to be carried out in the fourth quarter of the year and also includes the extension of contracts that grant Yoigo access to Telefonica's 2G and 3G networks in areas of the country where it does not have coverage until 2016, according to statements from the companies. The two companies said they had also sold mobile towers to infrastructure firm Abertis (ABE.MC) for 385 million euros ($511 million). Abertis said the deal would contribute 60 million euros to its earnings before interest, taxes, depreciation and amortization (EBITDA). Telefonica could not launch 4G as it did not have the right frequencies available due to a number of television channels that were using them. The company said it intends to build its own 4G network when possible. Spain has started a process to reverse the awarding of licenses for those channels. Yoigo, a small player with 6.7 percent of the market, has successfully grown its business as cash-strapped Spaniards turn away from bigger operators in search of cheap deals. But the company, a division of TeliaSonera, has not been able to compete on so-called "quadplay" deals that bundle fixed line, mobile, internet and television services. Telefonica has led the way on quadplay with its Fusion package, a model other operators are using. In a cut-throat market where over half a million people switched mobile operator in May, operators did not have to fear Yoigo poaching customers who wanted all their services in one bill. The deal will shake up the market by placing Yoigo on a level to compete with the likes of Orange, Vodafone (VOD.L), Jazztel (JAZ.MC) and ONO. Telefonica's O2 brand plans to launch superfast 4G mobile in London and two other British cities by the end of August, the company said in a separate statement on Thursday. (Reporting by Clare Kane in Madrid and Stockholm Newsroom) Link this Share this Digg this Email Reprints

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