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Small Spanish Telco Becomes Investor Darling as Rivals Droop

(Bloomberg) — Europe’s best-performing telecom stock this year has nowhere near the name recognition of competitors such as Telefonica SA, Orange SA or Vodafone Group Plc.
Yet Masmovil Ibercom SA, based in San Sebastian, Spain, has outdone them all, earning its place as the country’s fourth national carrier through acquisitions, debt, investments in fiber-optic broadband and aggressive pricing. The shares have more than doubled this year, compared with a 3.4 percent decline for the 21-member Stoxx Telecom Index.
Investors flocking to a small carrier with barely no broadband of its own in a country that already boasts Europe’s largest fiber network may seems counter-intuitive. But Masmovil is attracting interest by pitching itself as a low-cost provider in a country where the three big players appear more focused on seeking high-spending consumers.
The carrier’s growth is driven by a straightforward marketing strategy: a no-frills offering that doesn’t include pricier content such as soccer combined with mobile and fiber packages that are among the cheapest in the market. Masmovil also has an aggressive fiber deployment strategy, centered around the construction of a broadband network mainly in small towns and rural areas overlooked by the country’s largest carriers. A wholesale agreement with Orange helps it cover larger, urban areas.
Though rivals are beginning to counter Masmovil’s prices with their own low-cost offerings, most analysts aren’t

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