The National Markets and Competition Commission (CNMC) has proposed the practically total deregulation of the wholesale fiber optic market, which represents a historic milestone in the sector. To carry it out, the body chaired by Cani Fernández has initiated two public consultations to find out the opinion of all those affected regarding the end of certain obligations that promise to change the traditional rules of the game.
The initiative sounds like heavenly music for Telefónica Spain, but it upsets the rest of the country’s operators, until now protected in terms of the availability of FTTH where alternative operators do not reach by their own means, and also with wholesale fixed broadband prices. monitored by the CNMC. With this move, Telefónica’s recurring request to get rid of the rules of the last century begin to fall on fertile ground, once Spain enjoys a massive deployment of fiber optics to the home – as much or more than the sum of its large neighbors. continental-. Alternative telecoms have also been recipients of public aid to accelerate their deployments in areas far from urban centers, through types of technologies, a phenomenon that has encouraged the CNMC to reconsider Telefónica’s already secular ties.
The entry of new players, including satellite operators, along with the consolidation of new players and business models have also encouraged the regulator to propose the aforementioned almost full liberalization of the business.
The deregulation of wholesale fiber optic markets is encouraged by several considerations that will now be the subject of assessment and debate by the entire sector. The first reason is related to the increase in fiber optic coverage. In fact, Telefónica has achieved coverage close to 90% in non-competitive areas, similar to the coverage achieved in the competitive area.
According to the CNMC, there are enough competitors in both urban and rural areas to allow the market to operate according to its own rules of supply and demand, without the intervention of the regulator.
New competitive scenario
The second element that encourages ending Telefónica’s wholesale obligations refers to the decrease in the market share of the dominant operator. “In the fixed broadband retail segment, Telefónica’s share has fallen below 50% in the non-competitive zone (generally rural areas) and has registered significant annual declines between 2020 and 2023 (between five and 9 percentage points) in wholesale fixed broadband access markets, especially in the geographic area with less competition.
Also, the appearance of Masorange (the result of the merger of Orange and Grupo MásMóvil), the entry of the investment fund Zegona into Vodafone, the consolidation of alternatives such as Digi and wholesale operators such as Onivia or Lyntia have diversified the marketreducing the historical dependence of the sector on Telefónica.
Finally, commercial agreements between the different operators “have increased the availability of high-capacity networks and offers for the end customer”, which have also “facilitated the development of competition at the wholesale level and the improvement of the return on investment “.
You will only be subject to regulatory obligations the sharing of Telefónica pipes and poles at cost-oriented prices and under transparent conditions and non-discriminatory, in order to continue guaranteeing “the deployment of very high capacity networks and promoting competition in downstream markets.”
According to the CNMC, this infrastructure market (technically known as MARCo Offer, with regulated prices) is “crucial for the deployment of telecommunications networks due to the difficulty of replicating Telefónica’s infrastructure, which represents the majority of the cost associated with network deployment very high capacity”.
As is mandatory in this type of public consultations, interested parties may present their observations within a period of two months from the publication of the consultations in the Official State Gazette (BOE).
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