Vodafone (News - Alert) has agreed to acquire Ono, arguably the second-biggest service provider in Spain, for US$10 billion. Ono has about 15 percent share of the fixed network broadband market, trailing Telefónica’s Movistar brand at 42 percent.

Ono has the largest next-generation network in Spain with approximately 7.2 million homes “released to marketing” serving 1.9 million customers in 13 of Spain’s 17 regions, representing coverage of about 41 percent of Spain’s total households, Vodafone says.

But Vodafone argues there is huge opportunity to grow market share and revenue per account,  though one might ask why Ono itself seemed to lag in that area, losing customers at various points in recent years, though generally managing to sustain profits, though suffering a loss in 2013.

One might argue Ono’s private equity owners are less interested in organic growth and more interested in positioning a private asset that had some perceived problems for an eventual return to public markets. In such scenarios, financial engineering otten supersedes efforts to invest for growth.

Vodafone logically concludes it can do better. How much better is probably the issue.

Vodafone points out that Ono, with coverage of 41 percent of Spanish homes, has gotten adoption of 26 percent of homes passed and available for marketing.

Fixed network voice product penetration is 25 percent, high speed access penetration is 21 percent, while Ono also has gotten 11 percent penetration of subscription TV services and subscriber information module adoption of about nine percent, at an average of 1.7 SIMs per account.

In a competitive market, that might not be unusual. In other words, Ono has been able to sell at least one product to the equivalent of 98 percent of homes it passes. But Ono also claims growing triple play adoption. In fact, about 86 percent of accounts buy multiple products.

That would imply overall Ono penetration of about 29 percent or less.

Ono said in October 2013 that triple-play penetration was 39 percent, while dual-play adoption was 46 percent, with an average of 2.6 services purchased by an account.

Vodafone points to those statistics as evidence there is much more room to grow penetration and units sold to each account. In principle, that is correct.

But there is a countervailing argument, namely that Ono will have to wrest those gains away from other competitors eager to resist such predation. But Vodafone says it will bank on the ability to offer much faster Internet access to win market share.