Vodafone Spain hopes FTTH launch will help energize revenues

By Jim O'Neill on Jan 17 2014 at 8:00 AM

Vodafone Spain, kicking off its play to bring high-speed Broadband to more than 6 million customers over fiber to the home, says it will begin offering service to about 800,000 customers on April 1.

Although Vodafone hasn’t yet defined plans for pricing or tiers, it said the project – in which it’s partnering with Orange - includes plans to bring FTTH service to more than 50 major cities by September 2017, with a price tag for the expansion that could reach 1 billion euros. The deployment was slated for just a dozen cities when it was announced in March, including: Barcelona, Madrid, Valencia, Alicante, Badalona, Cordoba, Hospitalet, Malaga, Seville, Vigo, Valladolid and Zaragoza.

The deal has each company deploying horizontal infrastructure in their own service footprints, with fiber being independently owned, but built on like specifications. Each company will have access to the entire network.

In July, Vodafone and Orange reached a deal with Telefonica, Spain’s largest telecom, which gave them access to Telefonica’s fiber network, which currently reaches some 2 million homes. Telefonica, in turn, will have access to the new network being built by Orange and Vodafone where it doesn’t have access.

Telecom and cable companies in Spain, beset by enduring economic lassitude, have struggled to retain customers and have looked to build new revenue streams. Vodafone, the second-largest mobile operator in the world, has been hit hard as revenues from European mobile operations have fallen. In FTTH, it sees an opportunity to better compete by offering bundles that may be more interesting to consumers.

For all three operators, expanded FTTH capabilities will likely turn up the heat on competition in the over-the-top video space, as well, as they look to reach a declining audience that increasingly has turned to Internet TV for entertainment.

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