Vodafone to sell Spanish business to Zegona for up to €5bn

The companies have also entered into an agreement whereby Vodafone will provide certain services to Vodafone Spain for a total annual service charge of around €110m.

Chief executive Margherita Della Valle said: "The sale of Vodafone Spain is a key step in right-sizing our portfolio for growth and will enable us to focus our resources in markets with sustainable structures and sufficient local scale.

"I would like to thank our entire team in Spain for their dedication to our customers and relentless determination to improve our organic performance. However, the market has been challenging with structurally low returns."

At 1005 GMT, the shares were down 0.9% at 76.01p.

Russ Mould, investment director at AJ Bell, said: "Once a major force in the telecoms sector, Vodafone has lost its way in recent years and has been forced to review its business. That has led to asset sales and mergers with the intention of having a more streamlined platform from which to try and revive growth.

"The latest piece in the jigsaw puzzle is selling its Spanish business to Zegona. This deal is another tick in the box for the company’s turnaround efforts but the journey is far from complete. Vodafone still needs to simplify its business, having suffered from being in too many markets with too little resource.

"Marks & Spencer may hold the crown for the slowest turnaround in UK plc history, but Vodafone is right behind. The market has shrugged off the Spanish news, with the shares dipping on the announcement. This suggests the telecoms group needs to be more imaginative in reviving its fortunes otherwise its shares might continue to drift."