2014 Spain - Telecoms, IP Networks, Digital Media and Forecasts

Strong growth in FttP networks supporting bundled services

The value of Spain’s telecom market has contracted since the high of 2007, and it is likely to fall further during the next two years at least as consumers adjust to high unemployment, stagnant GDP growth and a tightening of domestic budgets. Although investment has also suffered, there is considerable activity in the mobile and fibre broadband sectors, which are propping up the sector overall. Spain’s market for bundled services has grown alongside considerable investment in faster IP networks, largely based on ADSL2+ and VDSL but increasingly focussed on FttP. Cable operators as well as Telefónica are at the forefront of the convergence markets, having launched 200Mb/s services to provide multiple-channel IPTV as well as VoD. Pay TV has seen considerable changes in recent years following the merger of Telefónica’s Via Digital with Canal Satélite Digital, and the acquisition by Telefónica of Canal Plus, which has given the incumbent considerable market dominance, with about three-quarters of the pay-TV subscriber base.

Spain has one of the largest mobile markets in Europe, with effective competition from four MNOs and a growing number of resellers. This competition, together with regulated roaming and MTRs, has driven down the cost of mobile calls in recent years. The market has seen great changes, including the auction of spectrum in a range of bands for mobile data use. Spectrum in the 800MHz band will become available for operators from January 2015.

The strong growth in the number of fibre broadband connections is beginning to tell on the sector’s dynamics, with fibre becoming one of the strongest growth sectors. Although several operators are investing in fibre, Telefónica is by far the dominant player. Operators are continuing to invest in their own networks, as well as networks being built through sharing arrangements.

This report introduces the key aspects of the Spanish telecom market, providing statistics on the fixed-network services sector, and profiling the main players and their strategies to meet an increasingly competitive environment. It assesses the main regulatory issues, noting the status of interconnection, local loop unbundling, number portability and carrier preselection. It also provides statistics and market analyses on the mobile sector, including an assessment of regulatory issues, a profile of the major providers, and an analysis of mobile data services such as SMS, MMS, i-mode, HSPA, LTE and mobile TV. The fixed and wireless broadband markets are reviewed, together with developments in related technologies such as fibre, and broadband powerline.

Key developments:

Telefónica moving to a virtual network for a third of its international infrastructure by 2016; Ono sold to Vodafone for €7.2 billion; government plans release of 700MHz digital dividend spectrum for mobile broadband use; Orange to cover 400 municipalities and about two-thirds of the population with LTE by end-2014; Telefónica contracts Nokia Networks to upgrade and expand its LTE networks; 4G licences in the 800MHz and 2.6GHz band raise €1.65 billion; TeliaSonera cancels sale of Yoigo; Movistar and Vodafone increase FttP services to 200Mb/s; mobile broadband revenue overtakes fixed-line broadband; regulator sets pricing for competitors to access Telefónica’s fibre network; Telefónica, Vodafone and Orange agree to share vertical fibre-optic infrastructure; consortium develops FttP network in Extremadura; FttP accounting for a quarter of new broadband additions; regulator’s market data updates to August 2014; telcos’ operating and financial data to Q3 2014; recent market developments.

Companies and subsidiaries mentioned in this report include:

Orange, Telefónica, Jazztel, ONO, Canal+, Prisa TV, Movistar, Vodafone, Lebara, Lycamobile 

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