Spain’s telecom market is one of the largest in Europe, supported by a population of more than 46 million. Mobile penetration is on a par with the European average and there remains room for further growth, particularly in the mobile broadband segment which has been supported by continuing investment in infrastructure among operators. With LTE almost universally available in Spain, the focus among operators has shifted to services based on 5G. Vodafone Spain was the first operator to launch a 5G network, in June 2019.

The other wireless network operators planned to wait until after the auction of spectrum in the 700MHz band.  Last month, the Spanish government confirmed that it will delay a planned auction of 5G spectrum due to the outbreak of the novel coronavirus in the country.  The government expected to award frequencies in the 700 MHz band, which had been previously used by Digital Terrestrial Television (DTT) services.  A new date for the spectrum auction will be announced once the measures adopted by the government to contain the pandemic come to an end.

[Note that there have also been 5G spectrum auctions delayed in a number of European countries including Portugal, Austria, France, and the Czech Republic.]

In July 2018, the Spanish government raised a total of EUR 438 million through the sale of 5G frequencies by auctioning spectrum in the 3.6 GHz to 3.8 GHz range, which will be key for the launch of commercial 5G services in the country. The government had set a reserve price of EUR 100 million for the 5G spectrum.

Spanish carriers Movistar, Orange, Vodafone all acquired 5G spectrum after 34 rounds of bidding. These carriers submitted bids for a total of 200 megahertz of spectrum, which was sold under 20-year licenses for lots of five megahertz at a minimum price of EUR 2.5 million each.

The fixed-line broadband sector has also been backed by investment in fiber infrastructure, enabling providers to develop improved bundled services and to compete more effectively. The regulator has fostered competition by providing access to Telefonica’s DSL and FTTP networks, while network sharing agreements have meant that Orange Spain, Vodafone Spain and MsMvil have become significant operators. By the beginning of 2020 fibre accounted for about 67% of all fixed broadband connections. Telefonica alone expected to provide complete FTTP coverage by 2024.

The outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the global telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may also be postponed or slowed down in some countries.

On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.

Although it is challenging to predict and interpret the long-term impacts of the COVID-19 crisis as it develops, these have been acknowledged in the industry forecasts.   As government agencies and regulators react to the pandemic crisis, they will try to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of telehealth and tele-education, among other solutions.

Ultimately, however, the full impact of the pandemic is still unknown. It’s unclear when European spectrum auctions may finally go ahead, or when governments may lift the restrictions that are making work to deploy physical infrastructure challenging. And amidst the economic uncertainty caused by the crisis and people sequestered at home, it’s no wonder nobody can fully commit to rollout schedules made before the crisis hit.