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Home > Communications > Telecommunications > General Telecom
Spain Telecommunications Report Q4 2008
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The regulator, the CMT, appears to have reversed its tough stance against fixed-line incumbentTelefónica, overturning its May ruling over access to the operator’s new fibre-optic network. Telefónicawill now only be required to offer access to cable ducts rather than offer access on a wholesale basis. Thishas caused some controversy with alternative operators, which state the cost of deploying their own fibrenetworks is too high for an operator with lower than 35% market share. This would therefore discount allcompetitors to the incumbent. While it is understandable that the incumbent should expect somecompensation for having borne the brunt of the new infrastructure costs the ruling puts Telefónica at adistinct advantage. At the time of writing, the incumbent’s progress on allowing competitors to access itscable ducts was not known, but the CMT’s ruling is likely to remain a contentious issue and Telefónicamay yet see itself forced to grant access to its network on a wholesale basis.
The introduction of faster internet services should help boost the broadband market. It remains the fastestgrowing segment of the market, with growth forecast to remain strong over the remainder of our forecastperiod. BMI anticipates the market will reach 9.6mn subscribers by the end of 2008 given the strength ofgrowth so far this year. Meanwhile, the mobile market shows little sign of a slowdown, causing BMI torevise its forecasts upwards. Growth in the first two quarters of 2008 has added over 1mn subscribers,bringing the market within reach of our end of year forecasts. We now anticipate the market will pass52mn subscribers by the end of the year.
The 3G market is the area of the mobile market with the fastest growth as Telefónica’s Movistar unitrecords fast growth of 3G subscribers. It has almost caught up with 3G market leader Vodafone, whichhas been at the forefront of 3G development in Spain. As ARPUs continue to fall, operators are lookingfor ways to increase usage of value-added services, which will help drive revenues. Operators’termination fees are facing pressure from both the national regulator and the European Commission,which hopes to reduce the cost of roaming across the EU. The CMT has proposed a yearly reduction oftermination fees, which will cause further issues for the operators. The worsening economic situation,both global and domestic, will further impact mobile use in the market, and operators may be in for abumpy ride. Nonetheless, as the market continues to report strong growth there are opportunities fornetwork operators and MVNOs to offer a variety of services to different segments of the market.
Meanwhile, Spain’s fixed-line market continues to buck the trend of decline seen elsewhere in Europe.This is in spite of continued mobile growth and limited regulation of the VoIP market that has pushedfixed-line demand into decline in other markets. Triple-play continues to drive up subscriptions and willremain the greatest driver of growth while broadband demand continues to rise. However, should VoIPservices increase in popularity, there may be a downturn in the market sooner than currently forecast.
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