Market Watch

Spanish Cable Operators Join Effort in 4G Spectrum Acquisition



Spanish cable operators Euskaltel, Telecable, ONO and R have partnered in a move to secure wireless spectrum in upcoming auctions in the 800, 900 MHz, 2.1 and 2.6 GHz frequency bands.
The four companies are calling on the Spanish Ministry of Industry, Tourism and Trade to guarantee new entrants fair access to the spectrum.

Analysis
Spectrum forms a critical part of mobile market positioning. Currently, cable operators in Spain offer mobile services through an wholesale agreement with mobile network operators. The only way for cable operators to be entirely independent from mobile operators would be to develop their own mobile network infrastructure and build their own spectrum assets.
 
This is a very expensive move which has been tried before in the US by Cox, Comcast and Time Warner with little success. Mobile operators in Spain already compete very aggressively in the roll-out of their mobile networks and it would be extremely difficult for cable operators to catch-up. However, this can be overcome if cable operators were to partner with smaller wireless players such as Yoigo and/or Clearwire Spain, using a similar model to Clearwire in the US.
Mobile broadband is a key area of the telco industry in terms of differentiation and revenue generation. The margins applied to mobile broadband by mobile operators are not sustainable in the wholesale context in which cable operators operate. With a substantial amount of mobile broadband connections acting as a replacement to ADSL or cable connections, cable operators need to build a stronger mobile broadband play if they want to remain competitive.

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