What happened in 2014?

Hi all,

2014 was a difficult year. Not from the business perspective, which was great, but due to the fact that lack of time prevented me to be active and add content to the blog.

This is going to change in 2015. Not because we are less busy, but because I will organise things in a different (and better) way. To start, I have changed the blog template. Now, It has a more up-to-date design, is responsive and can be read anywhere (your comments will be appreciated).

What happened in 2014?

Well, 2014 was a very active year regarding FTTH in Spain! From the subscribers perspective, the number of connected homes more than doubled, reaching 1.3M (the year started with 600k connected homes). Most of the subscribers are from Movistar, through.

Spanish telecom sector consolidation also happened in 2014. Vodafone bought ONO (a Spanish  cable company with more than 7M CATV-passed-homes for quite some money (3500EUR/customer) and Orange is in the process of buying Jazztel, a broadband operator with around 3M FTTH-passed homes.

As far as the mobile broadband sector is concerned, 4G technologies are being deployed in big cities and this will continue to happen in 2015, to extend 4G coverage.

This will concentrate broadband choice mainly in three players: Movistar (Telefonica), Vodafone and Orange.

It was a good year for the broadband sector!

However, the are big questions and issues to be solved in 2015 …

The most relevant one is that CNMC (Spanish telecom watchdog), raised a public consultation to force Movistar to open their FTTH network in those areas where competition is unlikely. As said before, Movistar is the operator with higher market share in FTTH (+90%) and is creating a new monopoly in the FTTH space.

Depending on how this ends up, Telefonica may stop investing and so the rest of the operators will. Let’s see what happens… because this is a very complex issue with a lot of interests.

From day one, alternative operators have been claiming that Movistar should open their new FTTH network to the competition in a wholesale manner to foster innovation and reduce CAPX and OPEX and seems that CNMC heard them and therefore released this public consultation.

On the other hand, Movistar was the only one really investing in FTTH intensively and this is the reason why they have such a big marketshare… However, in the mid term, this would generate a new monopoly so CNMC wants to act before this happens and regulate the market now.

The first consequence is that I foresee a reduction of investments in FTTH, at least until the picture is clarified. In the meantime, everyone can send their suggestions to CNMC regarding this consultation by following this link.

It is difficult to find the magical solution for this… but I will try next week. Stay tuned.

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2 thoughts on “What happened in 2014?

  1. A similar negotiation happened in 2009 when Telefonica was about to start their massive FTTH deployments. They said they would not invest unless they could deploy without having to open the infrastructure to others.
    This cut is a way to put pressure on CNMC because to reduce investments has impact on the economy, both directly and indirectly.
    Then, they were successful and the final recommendation was very favourable to Telefonica. Let’s see what happens now…

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