Threat or Catalyst? Impact of MasOrange IPO on TelefonicaThreat or Catalyst? Impact of the Upcoming MasOrange IPO on Telefónica
By Ion Jauregui – Analyst at ActivTrades
The potential IPO of MasOrange, valued between €5.37 and €9.44 billion based on applied EV/EBITDA multiples (ranging from 7x to 8.4x), could significantly reshape the competitive landscape of Spain’s telecommunications sector. The new entity, formed by the merger of MásMóvil and Orange Spain, aims to capitalize on a market that is once again showing appetite for new public listings. But what impact could this operation have on Telefónica?
The Return of a Real Threat in the Domestic Market
MasOrange is not just another telecom operator. With a leading customer share in Spain, an already deployed fiber optic network, and EBITDA margins above the industry average (37.9%), it is emerging as a highly efficient competitor. Although it carries a high net debt (€14.11 billion), it benefits from projected synergies of €500 million by 2027, which could justify a premium valuation versus other operators. Furthermore, the potential entry of a new partner into its shared fiber subsidiary with Vodafone—valued at up to €10 billion—could unlock capital, reduce leverage, and increase the appeal of its upcoming IPO.
For Telefónica, this represents added pressure in its most strategic market: Spain. While the company diversifies across Latin America, Germany, and the UK, its domestic market remains key for cash flow generation. A well-capitalized, listed MasOrange could intensify price competition, compress margins, and pressure Telefónica's local profitability.
Fundamental Analysis of Telefónica: Financial Stabilization Amid Structural Challenges
Telefónica has achieved progressive financial stabilization in recent years after a period marked by high debt and structural revenue pressure in mature markets. As of Q1 2025, the company reported the following key figures:
Revenue: €10.15 billion (+1.1% YoY), driven by growth in Germany and Brazil.
OIBDA: €3.20 billion, with a margin of 31.5%.
Net financial debt: €26.3 billion, improved from €27.48 billion at year-end 2023.
Net profit: €509 million (+9.6% YoY).
Telefónica has strengthened its financial profile through the sale of non-core assets and the rotation of infrastructure, such as towers and data centers. This has helped reduce debt and improve ROCE. It has also maintained an attractive dividend policy, with a €0.30 cash dividend per share for 2025, offering a yield close to 6.5% at current prices.
By region, Brazil and Germany continue to perform well, while Spain remains a mature, low-growth market characterized by high competition and regulatory pressure. In this context, the entry of a more efficient, fiber-leveraged MasOrange could negatively impact margins and market share in Spain.
Telefónica is investing in digital transformation, artificial intelligence, and 5G network deployment, although these efforts have yet to translate into double-digit revenue growth. The company also maintains a strategic alliance with the Spanish government (SEPI), which now holds over 10% of its capital—a potential source of stability amid possible corporate moves in the sector.
Technical Analysis: Bearish Pressure
Telefónica shares are currently trading at €4.56 as of Monday’s open, down -0.13% from Friday’s session. The stock appears to have lost momentum from the recent quarterly earnings release and has entered a sideways phase. Nevertheless, its long-term uptrend remains intact. Since the golden cross on April 14, the 50-day moving average continues to expand above the 100- and 200-day averages. The price is currently supported by the 50-day moving average.
The RSI shows slight overbought conditions at 56.32%, while the MACD suggests a weakening trend accompanied by a bell curve pointing to a control level around €4.08. As long as the current support at €4.43 holds, we may see a push to test the recent high of €4.628. However, if this momentum lacks strength, the price could retest the support zone, and a break below it could lead to a pullback with €4.43 as the first potential stopping point.
Conclusion
MasOrange's return to the stock market reshapes the playing field. For Telefónica, the risk lies not so much in the newcomer’s valuation, but in its operational efficiency, fiber advantage, and renewed investment capacity. While Telefónica remains a global reference in telecom, this move could force the company to accelerate its transformation and defend its share in its most mature and competitive market.
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