Orange Spain buys KPN subsidiary for $40 million: report

France Telecom’s Spanish subsidiary has taken over Simyo, a mobile virtual network operator (MVNO) previously owned by KPN of the Netherlands.

The operator’s statement on the transaction did not disclose any financial details, but Spain’s El Economista says the fee was approximately €30 million ($40 million), citing sources close to the deal.

Simyo serves about 380,000 customers in Spain and will boost the subscriber base of Orange Spain – the brand under which France Telecom (Paris, France) operates in Spain – to some 12.2 million.

France Telecom’s Spanish subsidiary has taken over Simyo, a mobile virtual network operator (MVNO) previously owned by KPN of the Netherlands.

The operator’s statement on the transaction did not disclose any financial details, but Spain’s El Economista says the fee was approximately €30 million ($40 million), citing sources close to the deal.

Simyo serves about 380,000 customers in Spain and will boost the subscriber base of Orange Spain – the brand under which France Telecom (Paris, France) operates in Spain – to some 12.2 million.

The arrangement will make little difference to Simyo customers because Orange Spain plans to continue running the business as an MVNO under its own brand and had previously been the host network for the KPN (The Hague, Netherlands) subsidiary.

It has also promised not to make any changes to tariffs or service conditions for existing customers.

The deal is likely to fuel speculation about a move for Yoigo, a Spanish MVNO owned by Sweden’s TeliaSonera (Stockholm, Sweden).

With TeliaSonera reportedly keen on selling the asset, both Orange Spain and Vodafone (Newbury, UK) have been identified as possible buyers.

Both operators are trying to strengthen their positions in core markets while reducing exposure to markets in which they are relatively weak.

A takeover of Yoigo, which claims a market share of about 5.6%, would help either operator to compete more effectively against market leader Telefonica.

TeliaSonera is reportedly hoping to make as much as €1 billion from a divestment, but some analysts think Yoigo is worth only around €600 million.

No doubt, Spain’s lacklustre economy is bound to dampen enthusiasm among other prospective bidders.