Broadband in Spain and my vision for the short term

During the last year the development of broadband and FTTH has dramatically increased, at least for the people like me, who live in urban areas.

I would say that 2010 and 2011 were the years of ONO, who invested a lot of resources to upgrade their CATV plant to offer 50 and 100Mbps using DOCSIS 3.0 technologies. They claimes this was fibre and I spoke about this in several posts, like this one, so I will not enter into much detail now.

However, 2012 was clearly the year of Telefonica. In 2011 they started a very aggressive deployment project to offer FTTH in the big cities (mainly Madrid and Barcelona) and now they are expanding to smaller cities. Their objective for Catalonia is to cover 50% of the population by 2013.

They are offering 50/5 Mbps and 100/10 Mbps (downstream/upstream) for those who also have Movistar for their mobile phone service. The price offer is not cheap though, 40EUR + taxes. Except ONO, which has its own network, the rest of telecom operators are doing little to compete against this.

Orange announced a couple of months ago that they were going to invest 300M EUR to deploy FTTH and Jazztel announced this week its intention to deploy FTTH, which will start with a 5.000 houses pilot.

In addition to this, small and local cable operators are starting to migrate to offer higher datarates. They normally evolve their CATV deploying fibre in a FTTN approach and ultimately, deploying DOCSIS 3.0. I really believe this is a wise approach to reduce CAPEX and avoid heavy investments.

In summary, Telefonica movements, which started a couple of years ago to react to ONO’s DOCSIS upgrade are forcing the rest of the operators to invest so they are not out of the business. I do not know whether they have reacted too late, but for sure the next months will be quite intense.

For rural areas however, the evolution has not been that intense and we are very soon to have a real digital divide between rural and urban areas. Small cable operators are covering this niche market quite successfully and also migrating to FTTN architectures.

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