Home / Blogs

Spanish Joint-Network Investment in FttH Seeing Returns

Don't miss a thing – sign up for CircleID Weekly Wrap newsletter delivered to your inbox once a week.
Henry Lancaster

Spain's economic anguish has had a number of repercussions for the country's telcos, with stable or declining revenue causing much nervousness as operators struggle to fund essential investment in spectrum and both fixed-line and mobile networks. Earlier this year Vodafone felt the pinch, announcing plans to cut its Spanish workforce by up to 1,000. Though general economic conditions have not helped, the move partly resulted from its own decisions. The company saw revenue drop for several quarters and so decided to save money by cutting handset subsidies. The ploy backfired: by the end of 2012 the company had lost 2.29 million mobile subscribers in the year, and as a result revenue dropped from £5 billion to £4.2 billion.

Yet Vodafone is one of the key players in Spain's surging fibre market, where investment in networks is a precondition of customer growth and financial reward. In common with development elsewhere (not least in the mobile sector), Vodafone is not going it alone, but is sharing the cost with other parties. In Spain, it has partnered with Orange. Unlike many other European markets, where operators have tended to concentrate on high-density towns (Paris, Milan, Amsterdam), in Spain FttH is more widely available in smaller towns and rural areas, often guided by the policies of regional governments. In this market there is plenty of room for smaller players to co-exist with the incumbent.

Orange launched an FttH pilot in Madrid as early as 2010, and earlier this year teamed up with Vodafone to invest up to €1 billion on a joint fibre network covering 50 of the largest cities. With complementary footprints, the fibre is owned independently though the companies share technical specifications to ensure compatibility as a single network. Each operator provides access to its own footprint, making the entire network available to each other. Orange recently switched on its fibre for commercial services, initially in Madrid, and planned to have some 800,000 premises connected to the network by March 2014, rising to three million by September 2015 and six million by 2017. In Madrid alone, up to 40,000 homes could be connected to the network.

The Orange/Vodafone joint network is open to co-investing third parties to share, which could dramatically extend the availability of fibre to Catalonia and Asturias where there are already extensive deployments through existing projects.

These developments are encouraging, and show that telcos operating through long-term economic doldrums are reassured that sensible investment strategies will provide dividends down the track.

By Henry Lancaster, Senior Analysts at Paul Budde Communication. Henry is also a contributor of the Paul Budde Communication blog located here.

Related topics: Access Providers, Broadband, Mobile, Telecom

 
   

Comments

To post comments, please login or create an account.

Related Blogs

Related News

Explore Topics

Sponsored Topics

Promoted Posts

Now Is the Time for .eco

.eco launches globally at 16:00 UTC on April 25, 2017, when domains will be available on a first-come, first-serve basis. .eco is for businesses, non-profits and people committed to positive change for the planet. See list of registrars offering .eco more»

Boston Ivy Gets Competitive With Its TLDs, Offers Registrars New Wholesale Pricing

With a mission to make its top-level domains available to the broadest market possible, Boston Ivy has permanently reduced its registration, renewal and transfer prices for .Broker, .Forex, .Markets and .Trading. more»

Industry Updates – Sponsored Posts

DeviceAtlas Wins 2017 IHS Markit Innovation Award

DeviceAtlas' Deep Device Intelligence Now Addresses Native App Environment

2016 U.S. Election: An Internet Forecast

Airpush Chooses DeviceAtlas to Provide Device Awareness to Mobile Ad Network

DeviceAtlas Releases Q2 2016 Mobile Web Intelligence Report, Apple Loses Browsing Market Share

What are the World’s Most Popular Smartphones

Mobile Web Intelligence Report: Bots and Crawlers May Represent up to 50% of Web Traffic

Best Practices from Verizon - Proactively Mitigating Emerging Fraudulent Activities

The Latest Mobile Web Report Q4 2015 from DeviceAtlas

2015 Trends: Multi-channel, Streaming Media and the Growth of Fraud

DeviceAtlas Brings Device Awareness to HAProxy

DeviceAtlas Granted Patent on Device Detection Accuracy Method

SpotXchange Chooses DeviceAtlas to Target Ads to Specific Devices

5 Ways Google Brillo Can Change the Device Landscape

Sophia Bekele's Keynote Speech on "Africa: The Next Frontier for Mobile Technology"

Standards and Browser Compatibility

36 Must-Know Mobile Market Statistics For 2014

Mobile Web Traffic: A Dive Into the Data

Mobile Web Has Now Overtaken PC in 40 Nations, Including India, Nigeria and Bangladesh

Nominum Announces Future Ready DNS