Orange has signed agreements with Másmóvil to renew and extend its wholesale relationship, reinforcing the return on its network investments
Orange welcomes the signing of this new long-term value-creating agreements:
- With these agreements Orange strengthen its positioning as #1 wholesale alternative player in spanish market.
- Orange secures a long-term highly margin contributive business, total cash inflows above 1 Billion € over the period of the contract
- Extension of FTTH agreement increases return on fixed infrastructure investments.
- 5G national roaming agreement, complementary to the RAN sharing agreement signed with Vodafone earlier this year, ensures an efficient and profitable 5G roll-out.
The Agreements and their impact
- Extension of national contract exclusivity until 2039 (+8 years).
- On the current Bitstream Service Agreement ( BSA) of 5.2 million lines:
- Overall similar value of Fixed agreement vs. current contract
- Risk profile improved as Másmóvil fees will be front loaded (1/3 of cumulated cash inflows received over 2020-2023 and the remainder on recurring basis) vs previous schemes (100% recurring revenues).
- Option for Masmovil to acquire IRU on this footprint after 2030 for an additional same amount as the initial upfront payment.
- National Roaming Agreement (NRA), 14500 sites
- Contract extension in time and in technology (+5 years, 2022/2028 and to 5G) drives increase of long-term value in spite of slightly lower minimum guaranteed.
- Penalties in case of rupture by Másmóvil significantly increased.
- Safety clauses for Orange: beyond 2023, if the weight of Másmóvil’s traffic increases, the NRA amount to be charged to Másmóvil will be adjusted accordingly.
- 5G outside NRA, around 4000 sites
- Service will be provided within exclusion zones of RAN sharing with Vodafone under NRA contract in Radio as a Service model : upfront fee per site in the 2 first years and then recurrent fee per site.
- This enables us to deploy 5G faster at lower cost.
Orange is one of the world’s leading telecommunications operators with sales of 41 billion euros in 2018 and 148,000 employees worldwide at 30 September 2019, including 88,000 employees in France. The Group has a total customer base of 268 million customers worldwide at 30 September 2019, including 209 million mobile customers and 21million fixed broadband customers. The Group is present in 26 countries. Orange is also a leading provider of global IT and telecommunication services to multinational companies, under the brand Orange Business Services. In December 2019, the Group presented its new "Engage 2025" strategic plan, which, guided by social and environmental accountability, aims to reinvent its operator model. While accelerating in growth areas and placing data and AI at the heart of its innovation model, the Group will be an attractive and responsible employer, adapted to emerging professions.
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