New Market Study Published: Spain Telecommunications Report Q2 2014

Although Spain's mobile market continued to decline throughout 2013, we believe there is scope for recovery for operators as 4G services have launched and smartphone ownership remains important.

There is no indication so far that this has improved ARPUs, but BMI believes this will be a longer-term development. Economic pressures continue to affect market opportunities, but there is little indication that subscribers are willing to abandon their mobile and broadband services. An improved economic outlook will help create more employment opportunities, in turn raising spending. We believe a slow increase in the number of mobile subscribers will start in 2014, and subsequent years will see a continued slow recovery in the mobile market.

Full Report Details at
- http://www.fastmr.com/prod/807701_spain_telecommunications_report_q2_2014.aspx?afid=301

Key Data

* The mobile market contracted by 5.9% year-on-year (y-o-y) in Q413, reaching
* The disconnection of active subscribers had helped maintain APRU rates but these continue to decline because of consumers' heightened price sensitivity and the continued implementation of mobile termination rate cuts.
* Dedicated mobile broadband subscriptions have not recovered, according to the Comision del Mercado de las Telecomunicaciones.

Key Trends And Developments

* Vodafone submitted a takeover bid of around EUR7bn for Ono, which was rejected by the latter's shareholders, and followed by a higher bid. It was reported in March 2014 that the acquisition of Ono was close to completion.
* Alternative Spanish fixed line provider Jazz Telecom (JazzTel) has reportedly finalised an updated mobile virtual network operator (MVNO) contract with Orange, with the new deal now valid until January 31 2018. According to ADSLZone, one of the most notable terms of the revised contract is its inclusion of access to Orange's LTE network, with both parties said to be working to allow Jazztel to offer its mobile customers 4G services 'as soon as possible'.
* The Comision Nacional de los Mercados y la Competencia (CNMC) imposed an 18% reduction in the wholesale fees charged by incumbent Telefonica to rivals accessing its ADSL broadband network. The change will only affect around 7.3% of the Spanish xDSL market, providing limited upside, but continues a trend towards a more competitive environment. Major brands such as Orange and Vodafone will be the main beneficiaries.

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