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Spain: Euskaltel split on national ambition

November 14, 2018

From David Del Valle in Madrid

Basque-Country cable operator Euskaltel is at a crossroads in deciding whether to stay local and consolidate its position in the north of Spain, or go national to compete with Movistar, Vodafone, Orange and MasMovil.

Its new major shareholder, the UK’s Zegona, is pushing for a national approach and is willing to take the control of the management of the company. The current president, Alberto García-Erauzkin and the CEO of Euskatel Francisco Arteche disagree on that strategy and, according to El Español, they would prefer to consolidate Euskaltel’s current position.

A power struggle is taking place following the VC investor Zegona increasing its stake from 15 per cent to the current 29.9 per cent, becoming the largest shareholder ahead of the bank Kutxabank.

For Zegona the Spanish Northern market is very limited, despite the fact that Euskaltel has a dominant position there along with its sister companies R in Galicia and Telecable in Asturias which combined have 400,000 pay-TV subscribers.

Zegona is also introducing Virgin Mobile in the Spanish market, a company that in the past tried to enter the Spanish market through Yoigo, finally acquired by MasMovil.

The largest telco operators -Movistar Vodafone, Orange and MasMovil- are concerned about the entry of Euskaltel into the National market, potentially intensifying competition and bringing down prices in an already crowded market, according to El Español.

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