Movistar cuts fibre optic rollout after being told to share

I wrote recently about fibre optic internet (offering speeds 33x faster than standard ADSL) being available in this area early next year.

Well, a spanner has been thrown into the works after Spanish competition watchdog the CNMC ordered Movistar to share its new fibre optic network with other operators in large cities. In response Movistar says that the fibre optic network will not be profitable in some parts of Spain and has cancelled around 35% of its installations, mainly to small companies and domestic users.

Movistar had been operating on the theory that the new network would be its alone to use. Currently the company has to maintain the copper wire network throughout Spain, and charges other operators a fee per user to use it. The law seemed to say that the new fibre optic network would belong to whoever installed it up to the point of connection of the home / block of flats.

But the CNMC has ruled that in major metropolitan areas it’s nonsense to have every company installing different fibre optic networks and that Movistar must share its network in these areas under the same ruling as the copper wire network. Madrid, Barcelona, Valencia, Sevilla, Málaga and large towns like Badalona, Alcalá de Henares, Coslada or Móstoles are all affected under the ruling.

So Movistar has, as promised, cancelled plans to roll out fibre optic in those cities “until it becomes economically viable”. I assume this is going to throw a major spanner in the economic growth of the country – the hicks in the sticks will have access to fibre optic, but the small companies and home users in major cities won’t. Which is good news for us hicks, who are already celebrating.

@KingNavas Jajajaja es que yo eso de los streaming… Supongo que ahora con la fibra óptica de 30 mg haré alguno…Pero no se de que jajaja

— Alejandro (@Boxicated) January 14, 2015

What Movistar is afraid of is that it has to pay to roll out the new network, and then competitors use the new netowrk and undercut its offers in a price war (hence the photo of a shark on the story 🙂 ). So the company will be concentrating on areas where the network will be exclusive to itself, or where it offers a full solution to large companies and price wars don’t happen.

Which, hopefully, means the towns of the levante. You can sign up to a Movistar newsletter here and they’ll tell you when the installation for your area starts.