Telefonica Should Share Local Fiber-optic Network - Vodafone

SANTANDER, Spain -(Dow Jones)- The country's telecommunications regulator should force Telefonica to share the lines of a high-speed fiber-optic network it is rolling out in Spain, the Chief Executive of Vodafone Group's Spanish unit Francisco Roman said Tuesday.

"The regulator's decisions don't address the lack of viability of laying two separate fiber-optic networks," Roman said in a telecommunications conference in Santander.

Roman said an operator needs a market share of at least 40% to justify its own fiber roll out. Telefonica has a 64% market share of traditional telephone line Internet subscribers, while Vodafone's recently acquired operator has a 3% market share. Cable operator Ono and France Telecom's Orange each have roughly a 10% share, and the rest is divided among smaller operators.

Last month, the telecommunications watchdog decided Telefonica would have to allow competitors to lay cable in its underground cable ducts, but wouldn't have to share the fiber-optic lines. A fiber-optic network will allow Telefonica to offer much faster Internet speeds.

Telefonica is the only Spanish telecommunications operator with its own fixed-line network and currently acts as a wholesaler so other operators can offer voice and Internet services over its traditional fixed-line network.

Roman added the new regulation strengthens Telefonica's grip on the market and undermines competition, hurting consumers.

-By Jason Sinclair, Dow Jones Newswires; +34 91 395 81 27; jason.sinclair@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 2nd September 2008