Telefónica investment plans 2012-2015

Telefónica is taking very seriously the massive deployment of FTTH.

They started in 2007 with some pilots and in 2010 they massively deploy FTTH in Barcelona and Madrid. This year they finished covering Barcelona and they are almost done in Madrid as well.

Their next step is to push hard and invest 1.200M EUR in the next three years to cover 50% of the Spanish population. Orange and Vodafone are screaming that Telefonica will be again in a monopolistic situation…

The point is that Telefonica strategy is giving them good results if we have a look at the statistics of the last month published by the CMT (Spanish watchdog).

FTTH connections in June in Spain increased by 12.000 users, while DSL increased by just 3.000 users and CATV decreased by 5.000 subscribers (follow this link in Spanish for more details). I think this is a tendency that will continue because many subscribers are migrating from DSL and CATV to FTTH. Additionally, with the VAT increase in September, video service taxes will change from 8% to 21% and this will severely affect the number of subscribers.

My question now is what will happen with the other 50% of the Spanish population that will not be covered by FTTH and also whether the alternatives will start deploying fiber in order to compete against Movistar. Both Orange and Jazztel announced that they were going to deploy FTTH but their plans have not been clarified yet. Vodafone I think is more interested in the mobile market and they will keep their plans to increase their market share there.

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3 thoughts on “Telefónica investment plans 2012-2015

  1. I don’t know the Spanish market particularly, other than that Telefonica appears very dominant. If other players don’t get their fingers out fairly soon surely they will miss the opportunity and Telefonica will win. Unless the regulator decides that other players should have access to Telefonica’s infrastructure in order to create some competition in the market.

    I guess the crisis in Spain may well be featuring in the thinking of other players, who are perhaps wary of investing at this time when the return on that investment may be a lot longer than they would like, with no doubt further austerity measures yet to be announced by Rajoy’s government.

    I guess the other aspect to this is 4G/LTE. What is the current state of play in Spain? In the UK a significant number of lower income households no longer have a landline, relying instead on mobile communications. Is there a similar situation in Spain? Could 4G effectively plug the gaps where FTTx is unavailable, and also offer an affordable solution for that section of the population without landlines?

    1. Hi Graham,

      Most of the big operators in Spain are much more focused on mobile than on fixed services. Therefore, Vodafone and Orange are working to deliver LTE shortly (together with Telefonica).

      In any case, this will not break the digital divide that at present is being created between ultrawideband and copper/mobile-based access systems.

      Some people have tried to remove their fixed broadband services. However, unless the use is very limited, the performance and reliability of a fixed connection can not be compared with a mobile one.

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