Spain: Spain Communication Profile

Strong increase in FttP networks supporting bundled services

The price of Spain’s telecom market has contracted since the high of 2007, and it is likely to fall further during the next two years at least as consumers adjust to high unemployment, stagnant GDP increase and a tightening of domestic budgets. Although investment has as well suffered, there is considerable activity in the mobile and fibre broadband sectors, which are propping up the sector in general. Spain’s market for bundled services has grown alongside considerable investment in faster IP networks, largely based on ADSL2+ and VDSL but increasingly focussed on FttP.

Cable operators inclunding Telefónica are at the forefront of the convergence markets, having launched 200Mb/s services to provide multiple-channel IPTV inclunding VoD. Pay TV has seen considerable changes in recent years following the merger of Telefónica’s Via Digital with Canal Satélite Digital, and the acquisition by Telefónica of Canal Plus, which has given the incumbent considerable market dominance, with about three-quarters of the pay-TV subscriber base.

Spain has one of the major mobile markets in Europe, with effective competition from four MNOs and a growing number of resellers. This competition, together with regulated roaming and MTRs, has driven down the cost of mobile calls in recent years. The market has seen great changes, inclunding the auction of spectrum in a range of bands for mobile data use. Spectrum in the 800MHz band will become available for operators from January 2015.

The strong increase in the number of fibre broadband connections is beginning to tell on the sector’s dynamics, with fibre becoming one of the strongest increase sectors. Although several operators are investing in fibre, Telefónica is by far the dominant player. Operators are continuing to invest in their own networks, inclunding networks being built through sharing arrangements.

This statement introduces the key aspects of the Spanish telecom market, providing statistics on the fixed-network services sector, and profiling the major players and their strategies to meet an increasingly competitive environment. It assesses the major regulatory issues, noting the status of interconnection, local loop unbundling, number portability and carrier preselection. It as well provides statistics and market analyses on the mobile sector, inclunding an assessment of regulatory issues, a profile of the major providers, and an analysis of mobile data services such as SMS, MMS, i-mode, HSPA, LTE and mobile TV. The fixed and wireless broadband markets are reviewed, together with developments in related technologies such as fibre, and broadband powerline.

Key developments:

Telefónica moving to a virtual network for a third of its international infrastructure by 2016; Ono sold to Vodafone for €7.2 billion; government plans release of 700MHz digital dividend spectrum for mobile broadband use; Orange to cover 400 municipalities and about two-thirds of the people with LTE by end-2014; Telefónica contracts Nokia Networks to upgrade and expand its LTE networks; 4G licences in the 800MHz and 2.6GHz band raise €1.65 billion; TeliaSonera cancels sale of Yoigo; Movistar and Vodafone increase FttP services to 200Mb/s; mobile broadband revenue overtakes fixed-line broadband; regulator sets pricing for competitors to access Telefónica’s fibre network; Telefónica, Vodafone and Orange acknowledge to share vertical fibre-optic infrastructure; consortium develops FttP network in Extremadura; FttP accounting for a quarter of new broadband additions; regulator’s market data updates to August 2014; telcos’ operating and financial data to Q3 2014; recent market developments.

Broadband Market - Overview

Spain’s broadband penetration is on a par with the EU average, though subscribers have continued to contend with relatively high access prices and slow average data speeds. Nevertheless, the incumbent Telefónica, operating under the Movistar brand, has launched a range of services offering fast data rates, while cablecos commonly provide 100Mb/s. The regulator has in recent years promoted fibre network sharing, developing a pricing structure for shared fibre infrastructure. The strong increase in the number of fibre broadband connections is beginning to tell on the sector’s dynamics, with fibre becoming one of the strongest increase sectors. Although several operators are investing in fibre, Telefónica is by far the dominant player. Operators are continuing to invest in their own networks, inclunding networks being built through sharing arrangements. This statement profiles Spain’s fixed and wireless broadband markets, together with developments in related technologies such as fibre, and broadband powerline. We as well provide forecasts for broadband uptake to 2020.

Movistar boosts fibre to 300Mb/s; Vodafone joins Fon network; Movistar and Vodafone increase FttP services to 200Mb/s; mobile broadband revenue overtakes fixed-line broadband; regulator sets pricing for competitors to access Telefónica’s fibre network; Vodafone scales back joint fibre agreement with Orange followed the acquisition of ONO; Las Palmas completes initial stage of muni WiFi network; Telefónica, Vodafone and Orange acknowledge to share vertical fibre-optic infrastructure; consortium develops FttP network in Extremadura; FttP accounting for a quarter of new broadband additions; regulator’s market data updates to December 2014; telcos’ operating and financial data to Q4 2014; recent market developments.

Convergence - Triple Play & Digital TV

Spain’s market for bundled services has grown alongside considerable investment in faster IP networks, largely based on ADSL2+ but inclunding VDSL and an increasing number of fibre launches in the major cities. Cable operators inclunding Telefónica are at the forefront of the convergence markets, having launched 200Mb/s services to provide multiple-channel IPTV inclunding VoD. Satellite TV has seen considerable changes in recent years following the merger of Telefónica’s Via Digital with Canal Satélite Digital. Additional recently, Telefónica’s acquisition of Canal Plus has given it dominance in the pay-TV market, with about three-quarters of the pay-TV subscriber base. The switch to digital terrestrial TV, re-launched in late 2005, was completed in early 2010. Nine national channels were removed in late 2013 following a court decision that broadcasters had been awarded This statement provides an overview of developments in bundled and VoIP services, and as well analyses the digital and satellite TV markets.

Telecom Market and Regulatory

The price of Spain’s telecom market has contracted since the high of 2007. It is likely to fall during the next two years at least as consumers adjust to high unemployment, negative GDP increase and a tightening of domestic budgets. Mobile penetration is high and growing steadily, while broadband uptake is backed by continuing investment in infrastructure in a bid to address the relatively slow data speeds available. The regulator has fostered competition by providing access to the incumbent’s DSL and FttH networks, which has stimulated fibre roll-outs. The newly elected conservative government will be pressed to implement policies which encourage the ICT sector, fasten the development of NGNs and ensure that Spain has a vibrant telecoms infrastructure to enable it to compete entirely in a world economy.

This statement introduces the key aspects of the Spanish telecom market, providing statistics on the fixed-network services sector, and profiling the major players and their strategies to meet an increasingly competitive environment. The statement as well assesses the major regulatory issues, noting the status of interconnection, local loop unbundling, number portability and carrier preselection.

Telefónica moving to a virtual network for a third of its international infrastructure by 2016; Ono sold to Vodafone for €7.2 billion; new government pressed to revitalise telecoms sector; Telefónica considers investment sales; regulator agrees to 6.8% increase in LLU charges; Telefónica develops new organisational structure; new indirect access model introduced; ONO secures a US$1 billion bond issue; Telefónica planning to invest US$14.6 billion in Brazil to 2014; revised wholesale broadband access regulations; regulator’s market data updates to August 2014; telcos’ operating and financial data to Q3 2014; recent market developments.

Mobile Infrastructure, Operators and Broadband

Spain has one of the major mobile markets in Europe, with effective competition from four MNOs and a growing number of resellers. This competition, together with regulated roaming and MTRs, has driven down the cost of mobile calls in recent years though the number of subscribers has fallen since 2011 as customers cancel mobile lines due to the continuing economic crisis. The market has seen great changes, inclunding the launch of services from Yoigo and the release of 900MHz frequencies for 3G services, inclunding growing investment in network upgrades to support LTE and HSPA+ technologies. This statement provides statistics and market analyses on the Spanish mobile sector, inclunding an assessment of regulatory issues, a profile of the major providers, and an analysis of mobile data services such as SMS, MMS, i-mode, HSPA, LTE and mobile TV. Selected market mobile forecasts to 2015 are analysed.

Vodafone trials LTE broadcast technology, progresses with VoLTE and VoWiFi plans; Orange Espana makes a €3.4 billion bid for Jazztel, boosting it potential ability to compete in the converged services market; government plans release of 700MHz digital dividend spectrum for mobile broadband use; Orange on track to cover 400 municipalities and about two-thirds of the people with LTE by end-2014; Telefónica contracts Nokia Networks to upgrade and expand its LTE networks; mobile revenue continues to fall as the number of subscribers plummets; rise in number portability places pressure on operators; 4G licences in the 800MHz and 2.6GHz band raise €1.65 billion; regulator proposes 80% cuts in MTRs to 2014; TeliaSonera cancels sale of Yoigo; Telefónica launches LTE in the 2.6GHz band, Yoigo launches LTE in Madrid; develops VoLTE technologies; regulator market data updates; telcos’ operating and financial data to Q1 2015; recent market developments.