2024-07-30 08:09:27
Regulatory body has made the decision to deregulate the wholesale access market for fixed telephony
This is an important gesture towards Telefónica, which has been advocating for the liberalization of certain sectors for months
A new era opens in the fixed telephony sector in Spain. The National Commission of Markets and Competition (CNMC) has made the historic decision to deregulate the wholesale access market for fixed telephony. A change that directly affects Telefónica, which has maintained a series of obligations dating from the time when it was a former public company.
Telefónica is released from the copper network. Until now, Telefónica was obligated to provide access to the copper network. Whether directly or when an operator had no access, Telefónica was responsible for offering operators access at a regulated wholesale price.
But this has changed. Within a period of six months, Telefónica will no longer be subject to these obligations. ADSL, which is increasingly close to disappearing in favor of fiber optics, will no longer be managed exclusively by Telefónica.
Less than 10%. According to data from the end of 2023 from the CNMC, fixed telephony has been gradually declining and now represents less than 10%. That is, households that only subscribe to fixed telephony and not together with internet.
Telefónica’s market share in this sector has also been decreasing, falling from 47.08% in 2017 to 41.79% in 2023. It remains the main operator, but the CNMC explains that the retail conditions for fixed telephony are quite similar and that, in general, the conditions are “relatively competitive”.
Access is easy. Telefónica has announced the closure of its copper exchanges and the copper networks are increasingly neglected, but the resources to provide access to fixed telephony are quite common.
The CNMC explains that “operators providing fixed telephony service with Internet primarily use fiber networks, either through their own accesses or by resorting to services such as local or fiber NEBA“. Therefore, it points out that “there are no high entry barriers”.
An important gesture towards Telefónica. “All we ask is to deregulate us and let us compete,” defended José María Álvarez-Pallete, president of Telefónica during the Davos Forum. This decision by the CNMC aligns with what the telecom had requested. “We are being regulated with analog rules from the last century, but we are in a new digital economy and playing with unequal conditions,” expressed Pallete.
In a market where the merger between Orange and MásMóvil has added strong competition, Telefónica wants to definitively close the chapter from the times when it was the national operator.
It won’t be the last. This deregulation of the fixed telephony market is the first to arrive, but it is expected not to be the last. Competition has already opened several public consultation processes to modify the obligations regarding various sectors of the telecommunications market in Spain.
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Future Trends in the Deregulated Fixed-Line Telephony Market
The recent decision by the National Commission of Markets and Competition (CNMC) to deregulate the wholesale access market for fixed-line telephony in Spain marks a significant shift in the telecommunications sector. As Telefónica sheds its longstanding copper network obligations, several future trends are likely to emerge.
Shift Towards Fiber Optic Networks
With ADSL becoming increasingly obsolete and the phasing out of copper lines, the industry will see a rapid transition to fiber optic networks. This shift will not only enhance internet speeds and reliability but also create a more level playing field among various operators. Companies are expected to invest heavily in upgrading their infrastructure to accommodate this trend.
Increased Competition
The deregulation is anticipated to unleash new competitive dynamics, particularly as Telefónica seeks to adapt to an era where it is no longer the sole dominant player. This could lead to innovative pricing models and services that cater to a broader consumer base, responding to the evolving demands of users who now favor bundled services.
Emphasis on Digital Transformation
Telefónica’s advocacy for deregulation is rooted in the belief that telecom regulations are outdated. The industry is likely to see a heightened focus on digital transformation, with operators leveraging new technologies like 5G, IoT, and artificial intelligence to enhance customer experiences and streamline operations.
Regulatory Evolution
The CNMC’s recent move may serve as a precursor to further deregulation across different telecommunications sectors. As the agency opens up consultations regarding modifications to various market obligations, operators might find themselves navigating a more flexible regulatory landscape, enabling them to respond quicker to market shifts.
Consumer Behavior Changes
With fixed-line telephony subscription dwindling to less than 10% of households, the industry could witness significant changes in consumer behavior. Customers may increasingly favor Internet-based communications, pushing operators to enhance their broadband services, effectively aligning with contemporary user preferences and habits.
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