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Spain's CMT sees more pain for operators in 2013

Source: Reuters - Wed 3rd Jul 2013
Spain's CMT sees more pain for operators in 2013

Earnings are falling for Spanish telecoms operators this year as recession drags on and competition heats up, with mobile broadband the only area of growth, the head of Spain's telecoms watchdog said.

Trends seen last year, which resulted in total revenue for the sector falling 7.2% to 35.2 billion, have continued into 2013, Bernardo Lorenzo said at a presentation on Wednesday of the regulator's 2012 report.

"Mobile broadband continues to be the only service with growing revenues," Lorenzo, president of the Telecommunications Market Commission (CMT), said.

While the rest of the sector has been badly hit by Spain's economic crisis and 27% unemployment rate, mobile broadband recorded a 29% rise in total revenue to 2.8 billion last year.

More than 352,000 people signed up for new fixed broadband connections last year, but the sector's total revenue dropped by 4.6% to 3.7 billion, the regulator said.

Mobile is set for another tough year, with Orange, Yoigo and virtual operators, which rent network capacity from established operators, catching up with market leaders Telefonica and Vodafone who are losing clients.

Mobile revenue dropped 16% in 2012 to 9.5 billion as consumers cut spending, switched to cheaper deals or ditched their mobiles altogether. Last year was the first time that the number of cellphone lines in Spain shrank, dropping by 1.9 million connections.

Internet-based instant messaging services like WhatsApp, which are free after a small initial payment, are proving even more of a challenge for operators this year, Lorenzo said, as clients shun more expensive text messages.

Customers are also switching provider for both mobile and fixed-line services, as operators fight to undercut rivals' prices. Telefonica, whose market share in broadband dropped to 48.5% in 2012 from 49.2% the year before, continues to loosen its grip over the market, Lorenzo said.

The company signed a reciprocal deal with Vodafone and Orange on Tuesday, allowing them to access its fiber optic installations, which offer faster broadband speeds.

Lorenzo said the regulator hoped to set prices for access before August.

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