The CNMC approves Telefónica NEBA service prices

The CNMC approves Telefónica NEBA service prices

The Comision Nacional de los Mercados y la Competencia (CNMC) has completed its consultation of Telefónica's new wholesale service called NEBA.

The new service was originally approved back in January 2017, and will enable Telefónica to offer virtual access to its fibre network across all of Spain, barring 66 pre-determined cities which the regulator declared as already competitive.

But the CNMC launched a consultation a few months afterwards when Basque operator Euskatel, made a complaint against the Spanish operator claiming that its prices were too low and therefore uncompetitive. At time the CNMC said its analysis showed that "an efficient operator specialised in the business segment" would not be able to replicate Telefónica’s prices. A rival "would obtain a negative profitability by providing the services included in Telefónica’s offer through the use of wholesale offers available in the market".

In addition the CNMC at the time indicated that the ‘replicability test’ rules will be updated every six months, to evaluate the replicability test according to any adjusted parameters. Which could therefore lead to further adjustments to wholesale price.

Following on from its yearlong investigation the CNMC says that Telefónica’s prices now pass the "economic replicability test" which proves that the fibre products as part of the new NEBA service can be replicated by an alternative operator.

The CNMC approved the methodology for the verification of Telefónica’s wholesale prices. Under it, the methodology establishes the criteria of the prices Telefónica is to impose for its NEBA services and ensures that it is consistent with the ‘replicability’ requirement as previously mentioned. Once this was established Telefónica offered its price proposal for the NEBA service at €17.57 a month, which CNMC has verified exceeds the “economic replicability test”.

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