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Spain - Telecoms, IP Networks, Digital Media and Forecasts
Market Briefing
Published: March 2011
Pages: 141
Tables: 236
From: GBP 549.00 Buy Now!
Research from: Paul Budde Communication Pty Ltd.
Sector: Mobile Markets
Publication Overview
This report provides a comprehensive overview of trends and developments in Spain’s telecommunications market. The report analyses the mobile, Internet, broadband, digital TV and converging media sectors. Subjects include:
- Market and industry analyses, trends and developments;
- Facts, figures and statistics;
- Industry and regulatory issues;
- Infrastructure;
- Major Players, Revenues, Subscribers, ARPU, MoU;
- Internet, VoIP, IPTV;
- Mobile Voice and Data Markets;
- Broadband (FttH, DSL, cable TV, wireless);
- Convergence and Digital Media;
- 3G subscriber and mobile ARPU forecasts to 2015;
- Broadband market forecasts for selective years to 2020.
Spain’s ambitious though geographically limited FttH plans under fire from economic crisis and cable network competition
BuddeComm’s annual publication, Spain - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in one of Europe’s most dynamic markets struggling to overcome larger economic difficulties.
The value of Spain’s telecom market has contracted since the high of 2007. Worth €40 billion in 2009, it may only have reached €38.5 billion in 2010 and an expected €38 billion in 2011. In common with other European countries, the market has been affected by the general economic turmoil, which has hit Spain more harshly than many other economies. Government deficit is running at about €117 billion, while deficit as a proportion of GDP is now above 11%.
Government debt is €560 billion, with debt running at 53% of GDP. These figures are higher than the EU limits set under the now-defunct stability and growth pact which requires an annual budget deficit no higher than 3% of GDP and a national debt lower than 60% of GDP. Financial constraints have impacted the government’s ability to fund national telecom infrastructure projects, and have fast-tracked the sale of a range of mobile spectrum bands, which may bring in up to €2 billion, in a bid to ease debt burdens.
In 2009 GDP fell 3.6%, driven largely by a significant fall in capital and in consumption softened by a 3.8% increase in public spending. GDP was expected to have fallen by only 0.2% in 2010 and is forecast to show 0.6% growth in 2011. Companies in all economic sectors have faced a drop in demand for products, under-productive capacity and restrictions in obtaining funding in capital markets. Investment in the telecoms sector has fallen significantly since 2008: liquidity and lower revenue remain a problem for telcos as they continue to struggle to fund their network upgrade commitments. The price index for services including telecoms dropped 0.7% in 2009 and about 0.4% in 2010.
Despite the fall in overall market revenue, the broadband sector is the catalyst for the market’s main activity, and is the only area that has showed positive growth, though data traffic on mobile networks should provide an encouraging boost in coming years. Service revenues for fixed-lines, Internet, mobile services and the audiovisual sector fell by 4.9% in 2009 year-on-year, and about 4% in 2010. Wholesale service revenues fell 8% to €6.61 billion, showing a continuation of a trend seen since 2006. Mobile telephony service revenue fell 4.1% in 2009, reaching €14.45 billion, and a further 2% in 2010.
Mobile penetration is high and growing steadily, particularly in the 3G sector, while broadband take-up is backed by continuing investment in infrastructure in a bid to address the relatively slow data speeds available. Cable operators have launched 100Mb/s services, matched by Telefónica in early 2011 on its limited FttH network. These upgrades are required to stimulate the market for triple play, Video-on-Demand and other IP-delivered offers. The regulator has fostered competition by providing access to the incumbent’s DSL networks through LLU, as well as to its fibre networks through regulating access to ducts and infrastructure.
The trend towards market consolidation and the entry of the first Mobile Virtual Network Operators (MVNOs) have resulted in several integrated operators providing greater infrastructure competition: two MVNOs also operate in the fixed and broadband market while several cable operators have launched mobile services following the imposition of access obligations in 2006. Alternative operators have invested in cable and LLU while mobile operators are gradually upgrading networks to provide high-speed data services. Prices have fallen as a result of competition, particularly through bundled offers, and intensive number portability.
The broadband market is dominated by Movistar, which owns the bulk of the country’s network infrastructure. The main competitors in the residential market are the two largest Multiple Systems Operators (MSOs) which have deployed HFC networks in the large cities, and some ISPs using the incumbent’s wholesale access network. There are few alternatives on the access side: some municipalities have ducts available, while a dwindling number of power utility companies unbundle the power loop to altnets. Consolidation within the broadband market has led to a more settled though concentrated market: four operators account for 90% of all broadband lines.
The development of DTTV has progressed mainly at the regional level, where analogue broadcasting was switched off progressively in four phases to April 2010 –considerably later than the initial proposal of January 2008. A few areas remain without adequate coverage due to their difficult landscape – DTT signals give technical coverage to 98.13% of the population, while to cover the remainder (about 700,000) the government has subsidised the satellite DTTV distribution platform from Hispasat and Eutelsat. By late 2010 Spain had completed the national DTT line up of FTA and pay-TV channels.