Mobile broadband the only bright spot for Spain's operators

Spain's operators have been hard hit by the country's deep recession, high unemployment and intense competition from new and cheaper players, and the situation is not set to improve in 2013.

The head of the country's telecoms regulator said earnings continue to fall, although mobile broadband remains the one bright spot on the market.

"Mobile broadband continues to be the only service with growing revenues," Bernardo Lorenzo, president of the Telecommunications Market Commission (CMT), told Reuters during a presentation of its 2012 report.

In 2012, total revenue for the sector fell 7.2 per cent to €35.2 billion ($45.9 billion), but mobile broadband recorded a 29 per cent rise in total revenue to €2.8 billion.

Overall revenue from mobile services fell by 16 per cent in 2012 to €9.5 billion as consumers cut spending, switched to cheaper deals or ditched their mobiles altogether. The country's two largest mobile operators, Telefonica's Movistar and Vodafone Spain, continue to lose clients to cheaper providers such as TeliaSonera-owned Yoigo, Orange Spain and other mobile virtual network operators set up by fixed operators.

Further, the mobile market is shrinking: Last year the number of mobile connections dropped by 1.9 million. Operators have been attempting recovery strategies such as "quadruple-play" bundles of fixed broadband, TV and mobile services to retain and attract customers. Telefonica also recently agreed to a fibre network sharing pact with Vodafone and Orange.

The situation for operators on the mobile market will be exacerbated this year due to new directives to cut mobile termination rates. This will have a further adverse impact on operator revenue, although it could have the eventual effect of lowering retail call charges for consumers. According to Reuters, CMT said mobile termination rates would drop by about 75 per cent to 1.09 cents a minute from 4 cents in April 2012, when the process of lowering rates began.

Spain has previously been criticised by the European Commission for delaying plans to cut MTRs. The CMT said its rates are now below the European average of 2.53 cents a minute, according to Reuters.

For more:
- see this Reuters article
- see this separate Reuters article
- see this CMT blog post (Spanish only)

Related Articles:
Telefonica signs fiber sharing pact with Vodafone, Orange in Spain
Orange Spain unveils LTE tariffs as price war deepens
Vodafone Spain revs up LTE launch to beat rivals
Spanish mobile operators dogged by churn as fixed telcos benefit
Vodafone, Telefónica suffer most from Spaniards ditching mobile phones in 2012
Vodafone Spain could cut hundreds of jobs as price war escalates
Analysys Mason: Fixed–mobile bundling has taken France and Spain by storm
EU angry with Spanish regulator over delay to MTR cuts

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