The much-ballyhooed and announced merger between Orange and MásMóvil will fill the pockets of the current shareholders of the two companies (especially the investment funds and directors of MásMóvil) but it will also have practical consequences for millions of customers and for some thousands of employees who work at both firms. Orange and MásMóvil are just two companies, but they work with ten commercial brands to provide service to more than 30 million lines, both for fixed broadband Internet connection (more than 7 million) and mobile (20.2 million) and television (1.5 million).
The merger of both companies will necessarily bring about a considerable lightening of the catalog of products and brands in a market like the Spanish one that is increasingly committed to simplicity. Consequently, thousands of subscribers will be forced to change brands or will be prompted to modify their rate plan. The consolation for them is that the merger will not materialize for at least a year, although the two companies can take advantage of that period to change their portfolio.
Orange has a much more simplified catalog than its partner, with three brands clearly positioned in the three fundamental market segments: Orange, for customers premium that in addition to Internet and mobile they are subscribers to pay television; Jazztel, for middle-income subscribers who need a good fiber and mobile connection and several lines; and Simyo, especially aimed at customers low cost looking above all for an affordable connection. The subsidiary of the French operator has recently made a significant selection of its commercial offer, retiring its brands Amena and República Móvil.
More road ahead has MásMóvil. The successive acquisitions with which it has become the fourth Spanish operator have added a multitude of commercial banners: MásMóvil, Yoigo, Pepephone, Lebara, Llamaya, Lycamobile, Virgin, Euskaltel, R, Telecable and Guu. The company led by Meinrad Spenger has a hard time slimming down that catalog for various reasons. MásMóvil is the banner that gives the group its name; Yoigo is the brand with the most advertising pedigree, especially in mobile-only customers; Pepephone is the main bastion of the offer low cost with a very important level of fidelity among the young public; Virgin, inherited from Euskaltel, is the banner with the most growth in recent months due to advertising promotion; and the regional cable brands (Euskaltel, R and Telecable) cannot disappear due to compromises for political and nationalist reasons reached when the purchase was approved. Only the rest of the brands such as Lebara, Llamaya or Lycamobile, initially created for immigrant clients, are easy to disappear.
Orange will also want to assert its strong position in pay television (690,000 subscribers), a segment in which its partner barely has a token presence with its own brand MásMóvil (an agreement with Agile TV) but which inherited almost 800,000 television customers from Euskaltel. The strategy involves convincing those subscribers of the Basque cable company that they can have football if they join Orange, which shares the exclusive rights to the Spanish League and the Champions League with Telefónica.
Job adjustment: as denied as it is inevitable
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The other practical consequence of the merger between Orange and MásMóvil will be the labor adjustment. The around 5,000 workers employed by both companies have reason to fear for their jobs. As is traditional in this type of operation, the protagonists always affirm that the templates have complementary but a few months after the merger takes place, they apply an employment regulation file to “avoid duplication”. It happened with the purchase of Ono by Vodafone, with that of Jazztel by Orange and it will happen again this time.
The labor adjustment may affect around 1,000 workers, 20% of a joint workforce of more than 5,000 workers, of which 1,900 correspond to MásMóvil and 3,300 to Orange, excluding in both cases the staff of the stores and the call center external, reported market sources. The French operator already closed last June a voluntary ERE for 400 employees with the commitment not to apply an adjustment again in at least one year, but that clause will already expire when the merger is completed in the second quarter of 2023, so you will have your hands free to negotiate a new ERE.
For its part, MásMóvil also ensured when it acquired Euskaltel that it could apply labor adjustments. And it is that although the fourth operator specified in the acquisition brochure that he would not make an ERE in the next five years in the Basque capital, he made that commitment subject to “variations derived from the evolution of the business”. The path is still clearer to dismiss workers from the Galician subsidiaries R Cable and the Asturian Telecable, with which they simply agreed to an agreement of intent not to execute another file.
