Spain wins the World Cup, but not in telecom.

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Two important telecom events took place last week. The first was the update on the spanish telecom situation reported by Spanish regulator CMT and the second was the victory of the Spanish team in the FIFA’s World Cup 2010 generating a seasonal effect (in traffic) similar to top-peak telecom traffic days (such as xmas new-year’s day).

Regarding the second quarter telecom update, Spain lost 27,006 mobile lines in May, bringing the total number to 52.56 million, up by 1.6 percent over the same month of 2009, according to the monthly report by CMT. The prepaid segment lost around 168,856 lines in the period, due to the adjustment carried out by Orange, following the entry into force of the prepay user identification obligation established by the Ministry of Industry.

However, the drop in prepay lines was partly offset by the addition of 141,850 lines in the postpaid segment. Over the last three months, Movistar won 33.55 percent of the total new additions, the MVNOs 31.69 percent, Yoigo 29.54 percent, while Orange attracted 19.25 percent of the overall mobile adds, and Vodafone had a negative mobile adds balance of 14.02 percent.

Mobile penetration reached 112.5 lines per 100 inhabitants, versus 112.1 in May 2009. The M2M sector went up by 23.3 percent over the same period last year, to over 1.93 million lines. The growth of the M2M sector brings the total number of mobile lines to over 54.50 million.

Some 373,155 mobile phone numbers were ported in May, up by 10.8 percent versus the same period last year. Yoigo, the MVNOs and Orange saw a positive balance in portability, while Movistar and Vodafone registered a negative balance. Yoigo won 34,094 users, the MVNOs added 6,671 users, and Orange won 5,945 ported customers. Movistar shed 3,355 users and Vodafone lost nearly 43,355 customers in the month.

Spanish operators added 54,625 broadband lines in May, reaching a total base of 10.14 million lines, up by 8.6 percent year-on-year and a penetration of over 21.7 lines per 100 inhabitants. The number of DSL lines rose by 49,276 connections or by 9.6 percent over the same period of 2009, reaching a total of 8.24 million lines at the end of May. Some 5,349 cable modem lines were added in the month, reaching a total of 1.90 million lines. The overall number of fixed lines dropped by 18,399, to 19.85 million lines at the end of May. Fixed penetration reached 42.5 lines per 100 inhabitants, down from 42.7 in the year-earlier month. A record 151,036 fixed numbers were ported in May, up by 19.1 percent from 126,836 fixed numbers ported in May 2009.

Net net, Spain maintains its competitiveness telecom scenario at very high levels. Mobile telephony remains as a highly saturated service and mobile broadband is the only trend that appears to have some room for growth. Small players get some additional quota but Movistar and Vodafone hardly feel the impact. Orange remains as the never-disturbing third entrant. Fixed telephony is under an long ongoing war where Telefonica benefits of it’s incumbent position while focusing in those latam markets that can bring growth (at any cost), 2nd tier operators hardly fight to get positive net adds and fixed broadband growth rate is slowing quarter after quarter.

But what about the telecom link with the World Cup?.

According to the operator’s data, the final game of the World Cup saw a 25-fold increase in calls from the Netherlands to Spain. T-Mobile Netherlands reported a post game peak of 800,000 text messages. KPN processed a total of 18 million SMSs, around 50 percent more than normal, Movistar estimates in more than 8 million SMS from 22:00 pm to 02:00 am – rates almost similar to new-year’s eve, Vodafone half of this… Facebook and Tuenti were expected to generate more than 5 million status updates and “i likes” (both social networks have over 10M registered clients, 45% of them using mobile handsets as first option of choice)… and a long tail of rates and KPIs that have been broken yesterday.

This will not altere any of estimations for future quarters in the spanish market, but makes the whole of us who like football and telecom a little bit happier.

Best regards, CVA

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