2013 Spain - Telecoms, IP Networks, Digital Media and Forecasts

Economic woes take toll on telecom revenue

BuddeComm’s annual publication, Spain - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media sectors of one of Europe’s largest markets. The report includes the regulator’s 2012 market data and updates to May 2013, telcos’ operating and financial data to Q2 2013 and market developments to mid-2013.

Telecom market overview

Spain’s telecom market is one of the largest in Europe, accounting for around 4% of the country’s GDP and directly employing some 67,000 people. The continuing economic turmoil has resulted in considerable financial constraints on consumers, resulting in a steady fall in revenue since 2008. In the mobile sector the number of subscribers has also fallen as customers drop multiple SIM card use. Mobile traffic volumes are now lower than in 2008. Telefónica still controls the bulk of national and local infrastructure, and despite a decade of deregulation it dominates the fixed-line voice market and accounts for more than half of the broadband market. Fixed-line operators trying to break Telefónica’s hegemony include ONO, Jazztel, Vodafone, Euskaltel and Orange. Key regulator measures have facilitated growth in the broadband market, while the 2013 co-operative network share and build agreement between the main players Telefónica, Vodafone and Orange will do much to extend FttH infrastructure nationally, and so speed up customer take-up of fibre-based services.

Mobile market

By mid-2013 all MNOs had launched commercial LTE networks, which are expected to extend to most most of the country by the end of 2014. With this infrastructure in place, the operators will be better positioned to develop m-commerce and contactless payments. In mid-2013 Telefónica partnered with the Spanish banks La Caixa and Santander to deliver m-payment services and a digital wallet. Users can combine existing credit cards into the digital wallet and can send and receive funds via their mobile phone using the recipient’s phone number. Spain has been at the forefront of m-commerce in recent years, with Barcelona having become one of the country’s first contactless cities following a project between banks, the City Council and merchants.

Key telecom penetration parameters – 2010; 2013

(Source: BuddeComm)

Market Highlights

• Telefónica’s two new quad-play packages include fixed-broadband at up to 100Mb/s, mobile voice and broadband, and a pay-TV package. The packages are intended to improve the operator’s share of the bundled services market, and to win back mobile subscribers lost following its abolishing subsidies in 2012.
• The agreement between Telefónica, Vodafone and Orange to share vertical fibre-optic infrastructure allows each operator to pursue its own programme but is based on reciprocity so that all three can use rivals’ roll-outs where needed. The deal provides the right to use infrastructure for at least 20 years and will go far to expedite FttH builds in the country.
• The EC suspended the regulator’s pricing proposal for wholesale broadband access in 2013, considering it incompatible with EU rules and detrimental to competition and investment.
• In mid-2013 Telefónica partnered with the Spanish banks La Caixa and Santander to deliver m-payment services and a digital wallet. Users can combine existing credit cards into the digital wallet and can send and receive funds via their mobile phone using the recipient’s phone number.
• Telefónica has trialled services enabling smartphone and tablet users to migrate between WiFi and LTE, and has also tested VoLTE voice calls.
• Both Yoigo and Orange launched LTE in mid-2013, with Orange expecting to expand its LTE footprint into 2014 to all provincial capitals. Orange has invested some €1.1 billion in LTE, including work to upgrade its network and the purchase of spectrum.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Spain. It provides further information on:

• Market liberalisation and regulatory issues;
• The impact of the global economic crisis;
• Telecoms operators – privatisation, acquisitions, new licences;
• Mobile data market developments in coming years in light of spectrum auctions and new license awards;
• 3G developments, regulatory issues and technologies including HSPA and LTE;
• Broadband migration to an FttH architecture;
• Historical and current subscriber statistics and forecasts;
• ARPU statistics and forecasts.

Data in this report is the latest available at the time of preparation and may not be for the current year.