It is quite funny to read that almost every single operator in Spain is rolling out FTTH trials. I wrote about the tests of Orange in Bufalvent industrial area, near Manresa, and a few weeks ago Vodafone announced that they were testing FTTH in Pedrosa industrial area, an industrial park located between Barcelona and L’Hospitalet de Llobregat.
Today, Telefonica is announcing that they are going to massively deploy FTTH and they are also saying that they are going to offer 50 and 100Mbps at decent prices. At the same time, several municipalities are starting to deploy FTTH, or at least, they are saying that…
One may thing that we will be in a very competitive situation in the short term… but I am afraid this will not happen. Let me explain why…
Telefonica announces that they will massively deploy FTTH now, but after the failure of their FTTH test in 2007, I do not know whether their contractors will have enough resources to start installing immediately, together with the fact that many of them had serious problems once Telefonica decided to stop the pilot last year.
Vodafone and Orange tested FTTH in industrial parks and I see this a strategy to reduce prices for fiber services to companies rather than preparing residential deployments.
So… what will happen?
I believe that Telefonica may start building FTTH but this will not have any immediate impact to the end users until next year and this will happen just in big cities with quick return rates, creating digital fragmentation in the country. We have to remind that Spain has no public broadband plan, meaning that the deployment strategy is left to the private sector.
Also, I expect other operators to remain expectant to the movements of Telefonica and react defensively, exactly as they are doing at present with copper technologies.