Spain’s telecom sector lurches from one pandemic inflection point to the next
Spain’s telecom sector has tracked the performance of the overall economy, which has been one of the most heavily impacted by the pandemic in all Europe. GDP dropped by 10.8% in 2020, while telecom revenue reversed the previous five years’ positive results by falling 5.3%. Fixed-line services were the hardest hit, with revenue falling 13.7%, year-on-year. Mobile voice services did not fare much better, falling 4.7%. This is despite relatively small shifts in the number of subscribers, though the harsh lockdown conditions resulted in a significant drop in usage.
It had appeared that a return to growth might be possible in 2021 following the lifting of the state of emergency in May, but the most recent surge in cases and the continued restrictions on travel may once again put the brakes on growth until at least 2022.
One bright spot in an otherwise grey landscape was broadband — both fixed and mobile. Spain’s fixed-line broadband market, in particular, managed to extend its decade-long pattern of steady growth into 2020, with a slight increase in demand caused by the need for fast internet access to support working and learning from home.
While most of Spain’s larger telcos delivered negative revenue and profit in 2020 — much in line with the overall sector — the up-and-comer Másmóvil has signalled that it wants to play in the big league. In March 2021, it launched a friendly takeover bid (valued at around €2 billion) for Basque’s fixed-line operator and MVNO Euskaltel. The deal was approved by Euskaltel’s board as well as the competition regulator. If successful, the deal will place the company in a better position to challenge the dominance of the main telcos Telefónica, Orange, and Vodafone.
- Vodafone, Orange, and Movistar each secure 2x10MHz spectrum in the long-delayed 700MHz auction. Orange and Movistar were also awarded one of the two remaining 10MHz spectrum blocks in the 3.5GHz band.
- Spectrum licence periods are to be doubled to 40 years in future spectrum auctions.
- Telefónica started testing WDM photonics meshes with Huawei, enabling the operator to implement transmission speeds up to 800Gb/s over its photonics mesh transport network in Madrid.
- SpaceX is offering a trial of its Starlink satellite broadband service in Spain.
- The 100Tb/s 5,900km EllaLink submarine cable connecting Madrid, Lisbon, and São Paulo, with branch lines to Fortaleza (Brazil), Madeira, the Canary Islands, and the Cape Verde islands, started operating in June 2021.
- Vodafone and Canalink are to build an extension of the 2Africa submarine cable to connect the Canary Islands with continental Spain.
- This report includes the regulator's market data to June 2021, telcos' financial and operating data updates for Q2 2021, Telecom Maturity Index charts and analyses, assessment of the global impact of Covid-19 on the telecoms sector, and other recent market developments.
Companies mentioned in this report
Telefónica, Orange Spain, Vodafone Spain, Movistar (Telefónica Móviles), Másmóvil, Euskaltel, Jazztel, Ono, Yoigo