Vodafone and France Telecom to “co-invest” $1.3 billion in Spain fiber venture

Vodafone and France Telecom are teaming up on the rollout of a €1 billion ($1.3 billion) fiber-optic broadband network in Spain.

The two operators aim to cover 6 million households and business premises – representing about 40% of the country’s population – in 50 cities by September 2017.

Services are expected to be available from January 2014, and to cover 800,000 housholds and workplaces by March 2014 and 3 million by September 2015.

Vodafone and France Telecom are teaming up on the rollout of a €1 billion ($1.3 billion) fiber-optic broadband network in Spain.

The two operators aim to cover 6 million households and business premises – representing about 40% of the country’s population – in 50 cities by September 2017.

Services are expected to be available from January 2014, and to cover 800,000 housholds and workplaces by March 2014 and 3 million by September 2015.

Each operator will take responsibility for rolling out fiber in “complementary geographies”, but adhere to the same technical specifications as the other to ensure compatibility.

Similarly, the companies will divide the task of installing in-building fiber but guarantee access to each other’s network.

They also say they will work with regulators to ensure they can access the ducts of fixed-line incumbent Telefonica (Madrid, Spain), as well as share in-building networks at cost-based prices and obtain administrative permits “in a timely manner”.

France Telecom (Paris, France) had previously announced plans to spend €300 million on extending fiber networks to 1.5 million Spanish homes by 2015, but Telefonica is the only other operator in the country to have made significant investments in the technology.

The incumbent reportedly spent €256 million on rolling out fiber in 2011 and €320 million last year, and has said it will invest €300 million a year in its network over the next three years.

Nevertheless, its network currently reaches only about 12% of Spanish homes and businesses.

Although the weak economy may be partly responsible for the slow pace of deployment, Telefonica has previously blamed heavy-handed regulation for the lack of progress.

Telefonica is required to provide a cost-based wholesale offer to other operators for services operating at speeds up to 30Mbps.

It must also provide access to its ducts to other companies deploying broadband networks, and share in-building networks at reasonable prices.

But the incumbent does not have to provide unbundled access to its higher-speed fiber-to-the-home network, with authorities keen to foment infrastructure-based competition.

France Telecom served just 12% of Spain’s broadband market last year, according to regulatory data, while the share held by Vodafone (Newbury, UK) was less than 10%.