According to the latest available data published by the CNMC corresponding to August 2021, Spain has 12.3 million households with FTTH fiber optic contracted. This figure represents an increase of 1.3 million lines since August 2020. The deployment already reaches more than 85% of the population, where large cities have almost total coverage. Now, fare prices are plummeting, but not for all operators.
The fiber optic networks in Spain larger ones are found by operators such as Movistar, Orange, Vodafone or MásMóvil. Between all of them, tens of millions of households are reached, some by repetition, giving users the option to choose the operator whose rate best suits what they need.
Many operators access Telefónica’s fiber
However, when not all operators go everywhere. Therefore, there are thousands of municipalities in Spain where Telefónica, which has the largest fiber network in Spain, is obliged to share its optical fiber so that other operators can offer connections through it.
This type of coverage is known as indirect fiber. Indirect fiber or NEBA, short for New Broadband Ethernet ServiceIt can be ADSL or fiber, and Telefónica is obliged to provide it throughout Spain except in 696 municipalities in Spain after the extension published by the CNMC in mid-October.
Telefónica may be obliged to offer this coverage, or it may be that the operator has a agreement to allow let another operator access it, such as those you have with Orange or Vodafone. Thanks to this, even in competitive municipalities it is possible that these operators can offer fiber through the Movistar network.
NEBA types
There are two types of NEBA: provincial and local. In the province, Telefónica has it divided into 50 plants per provincial sector, where it is the other operator that collects the traffic at the interconnection points and outputs the Internet. At the local, it is Telefónica who takes care of it, with 682 centrals.
The problem is that doing this has a cost that operators have to pay Movistar in terms of rent, since Movistar has to connect customers to its network. With ADSL, an operator disconnected the copper pair and connected it to their equipment. With fiber this is not possible, since each fiber that leaves the exchange serves 64 users. Therefore, the call was created VULA (Virtual Unbundled Local Access), which virtualizes an operator’s connection, even though it is still connected to the Telefónica network.
This VULA is included within the local NEBA that already has in Spain almost 1.96 million users as of August 2021, compared to the slightly more than 950,000 lines with provincial NEBA. This provincial NEBA does have traffic managed by the operator that the user hires, since Telefónica assigns it to him. However, the one that is growing the most is that of local NEBA.
16.68 euros for using Telefónica’s fiber and other costs
Operators have to pay Telefónica a lot of money to access their network. For each 10 GB link for 10 km, the price is close to 2,000 euros for discharge, with a monthly cost of 272 euros. From there, the cost also varies whether or not they have to do the installation at the user’s home, with a cost of 68 euros if they have to do the installation, or slightly less than 22 euros if it is already done. To this is added the monthly cost, set by the CNMC in 16.68 euros per month on rental concept. Once the operator has contracted capacity for dozens of clients, adding one more client has a much lower marginal cost, approaching the rental price itself.
For all this, an operator with indirect access will never be able to offer prices like those of Movistar, Orange, MásMóvil or Vodafone on its own network, since only the monthly cost per user is 16.68 euros, to which we must add other operating costs. It should also be taken into account that when the user unsubscribes, the operator has to pay almost 20 euros also to the operator for managing it.
In short, the crazy prices that we currently see in the 600 Mbps fiber from Movistar for 14.90 euros, or the 18.95 euros of Orange, we are not going to see them replicated by alternative operators, who are seeing how many users go to the large operators because they cannot match their offers. We’ll see how long these aggressive offers last.