12 Jan 2012Spain Broadband Overview

Despite the fact that the Spanish telecoms market was fully liberalised in December 1998, it is still dominated by the incumbent Telefonica de Espana. As the only Spanish telecoms operator with a nationwide fixed telephone network, Telefonica controls the entire DSL value chain. Duplicating the incumbent’s local access network would require significant investment, so alternative network operators have no other option but to purchase wholesale broadband access products from Telefonica.

However, DSL has limited capability to meet increasing demands for speed and traffic. Spain is far behind its neighbours Portugal and France in terms of FTTx deployment. To address the issue, in May 2009 the Spanish regulator published a study on the viability of competition in deployment of fibre infrastructure in Spain. Under a more conservative scenario, the analysis estimates that over a period of 15 years (up to 2023) 43-46 per cent of Spanish homes may have FTTH access provided by Telefonica or an alternative operator.

Madrid and Barcelona are seen as the most economically viable cities for fibre deployments due to their economic potential and high population density. As such they are expected to produce enough demand for two or three alternative fibre networks in addition to that of Telefonica. In the cities with populations over 50,000 alternative operators deploying fibre networks may expect to recover the investment within 9 to 12 years, assuming that they will be renting the ducts and civil infrastructure from Telefonica and deploying their networks incrementally, responding to an increasing demand for FTTH.

As of June 2011, there were 19.73 million fixed lines in Spain, showing a 42 per cent penetration. During the 12 months to Q211, the number of fixed lines recorded positive growth thanks to a boost in the residential segment. In total, 34,488 new fixed lines were connected in the consumer segment, while business segment lost 322,470 lines. At the end of Q211, the incumbent held a 58.9 per cent market share by subscribers, losing 4 percentage points since Q210. The second largest share was held by ONO which expanded it by 0.3 points to 12.2 per cent. Orange, Vodafone and Jazztel followed with 8.3 per cent, 7.6 per cent and 7.5 per cent respectively. The total number of preselected lines fell from 1,009,605 in Q210 to 795,297 in Q211.