Reaction Radio

It’s impressive to see how the Spanish industry has changed in such a short period and, as written before about the net adds battle, it’s amazing to see the huge difficulties that all the operators have to beat the incumbent, Telefónica (TEF), and increase their revenues’ share of the market. It’s a market where fixed lines represent the majority of the value although the source of revenue growth lies in broadband. Some interesting figures:

1. Fixed market revenues account for ~3€ Billion, of which Fixed line revenues comprise 55%. Yet the fixed line contribution is declining by -6.7% GAGR from 2007-2009.
2. Broadband fuels fixed revenue growth by stimulating line numbers and revenues by over 10% CAGR in the last 3 years.
3. Future broadband growth potential remains positive with the possibility of providing BB service to the 3.9 Million PC-equipped Spanish households with only dial-up or no internet access.
4. Decreases in Telefónica’s wholesale prices resulting from regulation, has allowed for the faster proliferation of higher speed connections by making them more affordable to end customer. Wholesale price reductions have reached up to 74% in some cases, yet have not fully been translated into customer savings. The price decreases have thus allowed operators to capitalize on revenue generation through cheaper offers and better margins from lower costs.

We will soon deliver our yearly broker report on the telecommunications situation in Spain, but I wanted to publish an executive summary of it and highlight some interesting facts and insights with our blog readers so that you can clearly understand the fixed and broadband market situation:

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