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Spain Telecommunications Report Q1 2012
Business Monitor International, Dec 2011, Pages: 120
Spain Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Spain's telecommunications industry.
Q112 report on Spain's telecoms industry contains revised and extended five-year growth forecasts, which chart the development of the country's fixed-line telephony, broadband internet and mobile subscriber markets through to 2016. With the exception of mobile ARPUs, all of our forecasts see revisions this quarter, with our new forecasts reflecting the latest data from the Spain's telecoms regulator, the Comisión del Mercado de las Telecomunicaciones (CMT), and the country's leading network operators.
The latest subscriber data published by Spain's four main mobile operators Telefonica, Vodafone, Orange and Yoigo show there were 56.82bn mobile subscribers in Spain in September 2011, representing a 3.4% yo- y increase. After posting net losses in late 2009 and early 2010, the market appears to have regained momentum, with a total of 807,000 net additions being shared between the four largest operators in the first nine months of 2011. In the three months to September, the mobile market saw a net intake of 210,000 customers; this was despite the deduction of 270,000 customers by mobile market leader Movistar (owned by Telefónica). For 2011, we estimate that Spain's mobile customer base grew by 2.0%. The relatively weak growth compared with 2010 enforces our view that the Spanish market is close to saturation point.
Nevertheless, although the potential for new customer growth over the next few years is limited, there is considerable scope for the mobile sector to continue evolving in terms of the type and quality of services used, and in terms of competition. For example, the issuance of new spectrum - including spectrum in the 2.6GHz bandwidth - will help the operators cater to increased demand for data services. Meanwhile, smaller players also managed to pick up regional spectrum, which will help increase competition. These smaller winners include cable TV operators. In September, the Spanish government announced plans to hold a fresh auction aimed at allocating spectrum that was not sold during the initial sale process in July and August.
Among the frequencies that are reportedly up for grabs are a 4.8MHz paired block in the 900MHz band and five 10MHz blocks of 2.6GHz spectrum. In August 2011, it was announced that nine of the 11 bidders approved by the government to participate in the government's auction of mobile spectrum totalling 270MHz had been awarded with frequencies.
Meanwhile, BMI estimates that Spain had more than 14.8mn broadband internet subscribers the end of 2011. Our estimate is based on new regulatory data that show that the number of broadband subscriptions (including both fixed and mobile connections) reached 14.53mn in Q311. Our estimate for the number of broadband subscribers at end of 2011 gives Spain a penetration rate of almost 32%. Although this is low by West European standards, our revised broadband forecast for Spain predicts that the market will grow by 44% over the five years. DSL is expected to remain the dominant fixed broadband technology. However, mobile broadband connections are predicted to account for an increasing share of the overall market.
In October 2011, it was confirmed that private equity giant, the Carlyle Group, had agreed to acquire an 85% stake in regional cable operator TeleCable from Spanish savings banks Liberbank (Cajastur). Liberbank will retain a minority stake after the transaction, which was scheduled for completion by the end of 2012. The transaction values the company at EUR400mn. Telecable currently has around 156,000 fixed and mobile voice and internet customers in Spain.
Spain has dropped from six to seventh place in BMI's latest set of Business Environment Ratings for Western Europe, with the change of position reflecting a lower score in the Country Risks category. The medium-term economic outlook for Spain has worsened considerably in recent months. While the domestic economy remains beset by high unemployment, falling house prices and severe fiscal retrenchment, the external environment has also deteriorated on the back of a severe slowdown in the eurozone bloc. Consequently, BMI has downgraded Spain's economic growth forecasts and now envisage economic growth coming in at -0.5% and 1.0% in 2012 and 2013, from 1.0% and 2.0% previously.
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