The National Markets and Competition Commission (CNMC) has put out to public consultation this Wednesday a proposal to deregulate the wholesale fixed telephony market that will be open for a month.
Specifically, the CNMC proposes that Telefónica be released from one of the obligations it has as a dominant operator and stop having to provide fixed lines to any customer who demands it, regardless of the operator.
The CNMC argues that “the number of landline telephone lines with Internet is increasing. At the same time, fewer households contract landline telephone service every day. Thus, the number of fixed voice lines not packaged with broadband (1P lines) is reduced every year.” Even so, alternative operators that want to provide fixed telephony service through the copper network (bundled or not with broadband) turn to the fixed access and origination market when they do not have direct access to the customer. Telefónica is obliged to provide access to alternative operators.
“From the point of view of access technology, operators that provide fixed telephone service packaged with broadband fundamentally use fiber networks, either through their own accesses or by resorting to wholesale services such as NEBA local or NEBA fiber. When they want to offer 1P lines to their customers, they also use their mobile networks (the provision of fixed connections through the mobile network is known as fixed radio access). For this reason, the wholesale market for access and origination of calls on fixed networks is no longer characterized by high barriers to entry,” explains the organization.
On the other hand, the CNMC recognizes that "the analysis carried out shows that retail fixed telephone services are provided under relatively competitive conditions." Telefónica's market share has been reduced by four percentage points (from 46.9% to 41.9%) between 2018 and 2022. From a wholesale point of view, the abandonment of copper networks by alternative operators causes AMLT wholesale lines to be reduced. This process has also been accelerated by Telefónica's announcements of the closure of copper plants, whose final dismantling will culminate in the first quarter of 2024.
In the public consultation launched this Wednesday "it is concluded that the market tends towards effective competition and that the application of communications sector regulations and competition law are sufficient to guarantee that this market develops under competitive conditions."
This decision is in line with the demands that José María Álvarez Pallete, president and CEO of Telefónica, has been putting forward for years on the basis that Telefónica has obligations that do not allow it to compete under the same conditions as the rest of its competitors in the market with the greatest competition and the largest number of telephone companies in the world.
