Vodafone anticipates few difficulties in acquiring Nowo

The chief executive of Vodafone Portugal, Mário Vaz, said today that he did not anticipate “complexity of decision” or “substantial remedies” in the purchase of Nowo and said that the acquisition would be notified to the Competition Authority in November.

Mário Vaz was speaking at a meeting with journalists about the 30th anniversary of the telecom operator at Vodafone Portugal’s headquarters in Lisbon.

“There are no objective reasons, we anticipate neither complexity of the decision nor substantial remedies,” the CEO said when asked about the issue.

On 30 September, Vodafone Portugal announced the conclusion of an agreement to buy Cabonitel, which owns Nowo, in an operation expected to be completed in the first half of 2023.

The intention of the deal, “if approved, is the acquisition of all the company’s assets, in those assets are the licenses” 5G, he said. This is because Nowo acquired spectrum in the fifth-generation auction.

Asked about the clause that the licences cannot change ownership in the two years following the attribution, Mário Vaz explained that “this is the licence ‘per si’, but the entity that is the holder” is the one that is acquired “it is a shareholder change of the company”.

This “clause, in particular, is not applicable to the specific case, it is not a disposal of the licence”, he stressed.

The manager does not anticipate complexity in the regulators’ decision on the operation, either “in the function of what is the dimension” that is being bought or in view of “Vodafone’s dimension” or the “market impact”.

Nowo “has a relatively small market share, for us, it has relevance, we are talking about more than 150,000 fixed customers” and more than 200,000 mobile customers, which allows us to grow”, besides that “there are synergies in the acquisition of the company, but there is no change from a competitive point of view, even because there is a new entrant”, he argued.

“We will be here to see what decisions the regulators have taken on this matter,” he added, alluding to possible doubts on the issue of the 5G spectrum.

The Competition Authority (AdC) will be notified during the first half of November “about what we are going to do when we take over the company, at that time, we will see” as the time it takes to approve the deal may bring conditioning factors, Mário Vaz said.

Vodafone Portugal has signed an agreement with Llorca JVCO Limited, the shareholder of Másmóvil Ibercom, for the purchase of Cabonitel, owner of Nowo Communications.

Asked why the seller would alienate that position in the Portuguese market, Mário Vaz anticipated that it might be issues linked to the evolution of the Spanish market.

“The market in Spain is nothing more than the reflection of what (…) we have referred to for this sector” is that “the dimension of the operators is key, consolidation is inevitable to happen”, he underlined.

This (Portuguese) market, “due to its size, three operators, is already a difficult number ‘per si’ to deliver the return that investors want”, said Mário Vaz.

About how many workers Nowo will absorb – between 120 and 130 – Mário Vaz said that it is a company with a “relatively reduced” number of employees and that “it is still early to be advancing” information about it.

“I don’t want to talk about what will happen with an approval that does not exist yet, that is pending,” he said.