The National Commission of Markets and Competition (CNMC) has announced its plans to completely deregulate Telefónica’s fiber optic network by 2025. This measure will put an end to the supervision of Telefónica’s fiber offers, eliminating the obligation to divide the country by zones and the need to offer wholesale NEBA fiber.
Obligation to share network and tariff supervision
Since the beginning of the fiber optic (FTTH) deployment, Telefónica has been under strict regulation by the CNMC. The initial advantage of the operator, thanks to the inherited infrastructures from the old copper network, led the CNMC to impose the obligation to share its network with other operators through the NEBA indirect fiber. This system allowed companies without their own network to rent Telefónica’s fiber to offer services to their customers.
Additionally, Telefónica has had to submit its offers to the “replicability test,” through which the CNMC verifies that competitors can match prices using NEBA fiber, ensuring that there is no margin squeeze. However, this process slowed down Telefónica’s ability to launch new offers, affecting its commercial agility.
Deregulation process since 2016
In recent years, the CNMC has been relaxing these measures. In 2016, the “competitive zone” was created, initially composed of 66 municipalities with enough alternative fiber deployments. In 2021, this zone was expanded to 696 municipalities, which meant that Telefónica only had the obligation to share its fiber in 25% of its network.
Furthermore, the importance of regulated indirect fiber has decreased as Telefónica began sharing it voluntarily through wholesale agreements with major operators like Orange and Vodafone, and with smaller operators through BlueVía. These agreements allowed Telefónica to also use third party networks, as in the Guadiana project, necessary due to the shutdown of copper in areas without its own fiber.
End of obligations in 2025
According to the newspaper Expansión, the CNMC plans to completely deregulate Telefónica’s fiber network starting in 2025. The recent merger of MásMóvil and Orange, which has relegated Telefónica to the second place in terms of customers, has been a determining factor in this decision. This change in the market dynamics means that Telefónica’s definition as a “dominant operator” is no longer applicable.
The CNMC will initiate a public consultation after the summer to gather the opinions of all affected operators, with the aim of having a new regulation ready by the beginning of 2025. This new regulation will free Telefónica from the supervision of its commercial activities and the obligation to share its network with others, thus eliminating the country division and price segmentation that have existed for the past eight years.
Implications for the market
The total liberalization of Telefónica’s fiber network will allow the operator to act with greater freedom and speed in the market, strengthening its competitive position. This measure also reflects the progress of the telecommunications sector in Spain, where fiber optic networks have significantly expanded, and competition has increased with the entry of new players and the consolidation of others.
With the end of restrictions, Telefónica will be able to launch commercial offers without the current delays, adapting more quickly to market demands and improving its responsiveness to competitors. This deregulation will mark a new chapter in the telecommunications market in Spain, boosting competitiveness and benefiting consumers with more options and better services.
Source: Banda Ancha