Recession slows Telefonica NGA

Fiber-optic net would upgrade broadband TV

MADRID — The recession has thrown up a roadblock in the roll-out of Spain’s Telefonica Next Generation Access fiber-optic network, according to research company Enders Analysis.

Launched 2006 with a reported $1.3 billion 2008-10 investment, Telefonica NGA aims to cover 40% of Spanish homes by the end of 2009.

Enabling high-speed broadband access, it allows Telefonica to upgrade broadband TV service Imagenio for multi-room and high-definition delivery. That would help Telefonica to compete with Spain’s biggest cabler ONO in core urban areas.

However, Spain’s “severe recession will limit consumer demand for expensive, higher bandwidth offers,” says the Enders report, “Next Generation Access in Spain.”

Spanish broadband household penetration growth slowed from 33% in 2006 and 39% in 2007 to 43% in 2008.

In January, Spain’s CMT competition regulator refused to force Telefonica to open its NGA for competitors. That was a victory for Telefonica, which dominates Spain’s broadband market with a 57 share. ONO has 16%, France Telecom’s Orange 13%. But NGA faces other challenges: expense and Digital Terrestrial Television.

Bowing January, Trio Futura, Telefonica’s top-bandwidth triple play bundle costs $150 a month.

“Telefonica’s top services are already more expensive than the equivalent in France, Italy or Britain,” said Enders’ Francois Godard.

Re-launched in November 2005, DTT has grown rapidly, draining pay TV attention, the report adds.

Spanish DTT household penetration was 44% at 2008 end, vs. 10% for satellite, cable’s 8% and IPTV’s 4%.

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