Spain approves new wholesale fibre market regulation

Spain’s communications regulator has finally approved new rules that require the incumbent to open up its fibre-to-the-home (FTTH) network to competitors.

The regulations are part of a wide-ranging review governing the country’s wholesale fixed broadband market, which have been more than a year in the making.

The controversial new rules from the Comisión Nacional de los Mercados y la Competencia (CNMC) will require Telefonica to provide wholesale access to its FTTH network across most of Spain.

Only 66 locations will escape regulation. In these so-called ‘competitive areas’, representing about 35 per cent of the country, Telefonica will not be required to share its network because there are already three or more companies offering high-speed broadband via FTTH or DOCSIS 3.0 cable connections.

The number of locations has risen substantially from the 34 originally proposed in CNMC’s draft document, which was based on data from the end of 2014, to the final figure of 66, after the 2015 figures were taken into account. This increase reflects the accelerated pace of FTTH deployment in Spain (see FTTH subscribers in Europe reach 36 million).

Spain ended 2015 with 3.1 million fibre-optic subscribers, almost double the year-ago number. Of these, 71.3 per cent are served by Movistar, the commercial brand for Telefonica in Spain, whose network now passes more than 14 million homes.

In the remaining 65 per cent of the country, Telefonica must within 18 months start to provide other operators with virtual access to its fibre-optic networks, so-called 'virtual unbundled local access' (VULA).

Even in locations that are free from fibre regulation, Telefonica must continue to provide wholesale access to its copper network as well as share its duct infrastructure – which has helped rivals Orange, Jazztel and Vodafone expand their fibre networks significantly in recent years.

Orange Spain, for example, plans to reach 10 million homes by the end of the year (see Fibre features prominently in Orange’s €15B investment plan).

In the business market, which is deemed to be less competitive, Telefonica must provide wholesale access to both its copper and fibre networks across the entire country.

According to the Spanish press, Telefonica has repeatedly rejected calls to open up its fibre network, and has warned that the CNMC's proposal would have the opposite of the intended effect and prompt operators to reconsider major investment plans.

Now the operator looks set to carry out its threat to slow down its FTTH plans. Telefonica will cut back investment by 20 per cent, and instead concentrate its roll-out on the cities that are free from regulation, according to reports.

In accordance with European and Spanish regulations, the regulations will be in place for three years before review. In the meantime, the CNMC said it would continue to keep a close watch on the evolution of competition in the fixed broadband market.


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