Spanish incumbent telco Telefonica has signed an agreement with alt-nets Vodafone and Orange, allowing parties to share vertical fibre infrastructure in buildings in Spain. According to the terms of the deal, Vodafone and Orange will make payments to Telefonica for each connection which they gain access to in this way. This payment will ensure access to Telefonica’s network for 20 years. The amount of these payments has yet to be revealed but they will be set by the Spanish Telecommunications Market Commission (CMT). In return, Telefonica will gain access to building infrastructure deployed by Vodafone and Orange in areas which its own network does not reach. Effectively, the agreement means that as fibre deployments are made within buildings, each of the companies will be able to gain access to the infrastructure.
The move follows the announcement of a partnership in March 2013 between Vodafone and Orange covering next-generation access investment. The Spanish subsidiaries of both companies plan to invest EUR 1.3 billion (USD 1.3 billion) in a joint FTTH network which will cover 50 Spanish cities. The joint network will pass 800,000 premises by March 2014, increasing to 3 million by September 2015 and 6 million by 2017.
The joint FTTH network is intended to give both Vodafone and Orange more competitive independence, since both operators currently lease lines from Telefonica via wholesale and LLU agreements. The latest tripartite agreement forms a crucial part of their high-speed broadband plans, since both companies need access to Telefonica’s in-building infrastructure in order to make the most of their own fibre network investments.In theory, these developments will allow all parties to operate on a more level playing field, leading to increased competition and lower prices for consumers. The reaching of an agreement was due in part to the intervention of the Spanish regulator at the insistence of Orange and Vodafone. The regulator now needs to stipulate the fees paid per connection by all parties involved. This next decision will be crucial in determining the future cost of high-speed broadband services in Spain.