Vodafone acquires 5G spectrum in Spain as competition bites

As it battles increased competition in Spain, Vodafone's local operation has snapped up a €198.1m band of mobile spectrum for 5G data services as the Spanish Economic Ministry’s auction was concluded on Wednesday.

Vodafone Spain, which was shown up as a weak spot in the group's first-quarter results earlier in the day, acquired 90 MHz of contiguous spectrum in the 3700 MHz band. This spectrum will be used to deploy 5G services that will enable gigabit speeds and lower latency and enhance applications such as connected vehicles and robotics, industrial automated systems and virtual and augmented reality by .

The spectrum acquired has a twenty-year term and will be paid in 20 equal annual instalments at a 2.35% interest rate, the FTSE 100 telecom operator said on Wednesday.

In addition to the 90MHz of 3.7GHz spectrum purchased at auction, Vodafone Spain also holds 20 MHz of 800MHz spectrum, 20MHz of 900MHz spectrum, 40MHz of 1800MHz spectrum, 35MHz of 2100MHz spectrum and 60MHz of 2600MHz spectrum.

Vodafone Spain's service revenue declined 2.2% in the first quarter of the financial year to €1.114bn, worsening from the 1% decline in the preceding quarter, despite growing its mobile contract base by 141,000.

Group chief executive Vittorio Colao, who recently announced his forthcoming departure, said increased competition was proving troublesome in Spain and Italy.

Analyst George Salmon at Hargreaves Lansdown said: "The long-standing problems with telecoms is that consumers want a better deal every time they renew a contract, and there’s little to differentiate between providers other than the price they charge. That means competition between networks can be fierce. Unfortunately, that’s something Vodafone is finding out the hard way, with pricing in Spain being reassessed as a result of extra competition."