Spanish spectrum auction generates €1.65 billion

01 August 2011 | Kavit Majithia


The latest mobile spectrum auction in Europe came in Spain, and raised €1.65 billion for government, falling below early projections of €2 billion.

It is thought the larger tender winners, which include Telefonica’s Movistar, Vodafone Spain and France Telecom Orange, will contribute to 98.5% of the overall amount paid. Other winners include regional operators Ono, Jazztel, Euskaltel, Telecable and Telecom Castilla La Mancha. The spectrum auction in Spain is the second held this year, after France Telecom and Swedish-based TeliaSonera committed to pay the Spanish government €168 million. High-speed next-generation services in the region are expected to launch throughout the year, and much of the proceeds will be used to lower the country’s high-profile debt.

The 310MHz auction saw Vodafone Spain awarded a total of 60MHz of new spectrum, and the company said it will “draw on the experience of Vodafone Germany” in launching the service in Spain. Vodafone Spain has aggressively targeted spectrum in Spain, and has also acquired a total of 20MHz in the 800MHz band, which will become available after the switchover from analogue to digital TV broadcasting in Spain is complete.

The company said the latest spectrum acquired in 2.6GHz band is immediately available for use.

Despite the increasing take-up of LTE technology, and the rising advent of spectrum auctions across Europe, Ovum senior analyst Nicole McCormick believes there is still a lack of pricing innovation in the LTE model across Europe, which is serving as missed opportunities for operators to promote LTE as a new service for its customers.

““LTE provides operators with the opportunity to experiment with new and innovative pricing models, which allows them to find the best way of deriving revenues from the premium service,” she said. “However, most operators have not grasped this opportunity. Instead, LTE tariffs in the regions Ovum analysed are dominated by unlimited offerings and large data buckets, which can be problematic.”

The potential in this market for operators is clear. Vodafone Spain said it saw a strong growth in the use of smartphones and internet services, to boost data revenue growth by 22% over the past financial year.