Orange and Vodafone sign an agreement to deploy fiber networks in Spain

In order to extend high-speed broadband and offer competitive alternatives in Spanish market.

The objective is to reach 6 million homes, business and offices (building units) in over 50 Spanish cities.

The agreement includes the deployment of two complementary networks, with a reach of 3 million buildings each one, and both companies will ensure mutual access and use of their infrastructures.

This partnership will extend fiber footprint in Spain, increase offer and competition in the market and ensure maximum efficiency in deployment and investment, always with scrupulous respect of competition rules and regulation.

The agreement is opened to other operators who want to join this investment project.

Both companies ask for immediate changes in broadband regulation in order to remove obstacles to effective competition and demand a fast conclusion of negotiations with incumbent operator about vertical infrastructures.

Jean Marc Vignolles and António Coimbra, CEOs of Orange Spain and Vodafone Spain respetively, announced today an agreement to deploy a complementary and coordinated fiber network (FTTH) in Spain in order to reach 6 million buildings in more than 50 cities, for the next 4 years and a half.
According to the agreement, Orange and Vodafone will deploy their own FTTH networks in complementary areas (both horizontally and vertical cabling required to access to the buildings). Additionally, Orange and Vodafone will facilitate mutual access and use of their infrastructures. Furthermore, both companies will negotiate together sharing arrangements with any other operator which has vertical infrastructures in the territories included in this agreement.

Orange and Vodafone agree also the timetable and geographical areas of this deployment plan, which will be as similar as possible in order to ensure reciprocity and balance of the commitments. The objective is to reach 3 million households in 2015 to 6 million in 2017, covering more than 50 cities and significantly extending FTTH footprint in Spain. The pace of deployment could be adapted by mutual agreement according to market evolution and the regulatory environment.
Coverage areas of horizontal networks built by each company will be complementary and not overlapped. Their technical specifications will be also compatible in order to be connected and build a unique network with a greater reach, and so maximizing efficiency of investments. Each company will own the network deployed in its coverage area, sharing investments.

Regarding vertical cabling, Orange and Vodafone will build their own vertical infrastructures in those buildings where they do not exist within their coverage
areas. Both companies will share their vertical infrastructures and, if they are already deployed by any other operator, they cooperate in obtaining access to those infrastructures. Each company will be responsible for the maintenance of its network in its territory.

Connection of final customers, delivery, maintenance and final service management will be developed by each company independently. Also, marketing offers of both companies will be diferent and, therefore, price, support services and distribution channels will be totally differentiated. So the agreement will revert to the benefit of the customers, because it ensures plurality of offers, extend the reach of very high broadband access and increase competition in the market.
This agreement is opened to other operators that want to invest in this deployment model.

regulatory environment

The possibility of sharing vertical infrastructures with other operators in coverage areas is a key element for the success of this agreement. Orange and Vodafone have been independently negotiating for months with Telefonica to share vertical infrastructures, with no positive results any of them.

This agreement has been agreed trusting in a near regulatory environment which allowed:

Full vertical sharing inside the buildings, as regulation stipulates, and a price according to real cost.

An easier access to Telefonica's ductos, which is essential to facilitate a fast and massive deployment of the new network.

The elimination of the 30 Mb limit of NEBA offer in ecomnomic conditions which allow competition in the fiber market retail.

An easier and faster obtaining of necessary permissions to carry out the planned deployments, by coordinating administrative response of municipalities and neighborhoods.

"We are very pleased to present an agreement as the one of today, with two operators like Vodafone and Orange Spain joining forces to accelerate the deployment of fiber in Spain", said Jean Marc Vignolles, CEO of Orange Spain. "This project will mean a significant investment for Spain and we hope it will contribute strongly to economic growth and employment in the country," he added. Finally, regarding regulation, Vignolles said: "In order to fulfill in time the objectives of deployment we have agreed, it's essential to reach an agreement with the incumbent operator relative to share vertical infrastructures but it hasn't been possible so far. "

Meanwhile, António Coimbra, CEO of Vodafone Spain, said, "I am particularly proud of this agreement because it will allow the development of advanced communications offers to the benefit of Spanish customers." Antonio Coimbra also expressed confidence "in a near regulation about wholesale broadband offer without speed limits and also about wholesale prices to promote effective competition and to provide access or sharing of infrastructures to ensure a massive and efficient deployment of new networks. With the investment of operators and the accurate regulation, competition will increase in Spanish telecommunications industry and Information Society will advance ".

success of previous agreements

This is not the first time Vodafone and Orange sign an agreement to share network deployments. Both companies signed a RAN sharing agreement in 2009 in order to extend 3G mobile data coverage in rural areas (populations among 1,000 and 25,000 people). The agreement has been so successful that it was extended last year to 2G technology in the same geographical area, with a share deplyment goal of 6,000 common sites in 52 provinces.