Spain - Strong Growth in FttP Networks Supporting Bundled Services, Find New Report

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.

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