There are dozens of virtual mobile operators in Spain, but the operators that are in charge of deploying the mobile networks on which all these operators work are reduced to four, and possibly three in the future after the change that the Government is preparing.
The reason is that in order to deploy a mobile network, it is necessary to have the raw material of the radioelectric spectrum, and this is limited and owned by the State, which is in charge of auctioning and adjudicating it following rules that are about to change, such and how they advance in Broadband.
In order to guarantee greater competition in the sector and that the spectrum is distributed equitably, a maximum spectrum limit is imposed that operators can accumulate (spectrum cap) and that allowed the birth of a fourth operator with a network (Yoigo) in 2006 .
Now, the Ministry of Economy and Digital Transformation plans to extend the maximum frequency limits that a single operator can have, as stated in the new modification of the National Frequency Allocation Table (CNAF).
Basically, with the new project, each operator will be able to accumulate a maximum of 160 MHz (instead of 135 MHz) in the 1800, 2100 and 2600 MHz bands, and a maximum of 140 MHz (instead of 120 MHz) in the band of 3.5 GHz. This will allow the available spectrum to be distributed among three operators and leave nothing to feed a fourth operator.
The reason for once again making it possible for the spectrum to be shared between three telcos would be to avoid weakening the competitive capacity of the sector, which endangers the sustainability of future investments such as 5G, and which is vital for the future of the Industry . Also, with more spectrum in their possession, operators will be able to offer higher speeds and more capacity to serve more users. In short, it is about having networks deployed more efficiently.
The existence of the fourth network operator vanishes
En principio, la medida
In principle, the measure should not have a special impact on the market, because the spectrum has been assigned to four operators for some time until 2038, but the future merger between Orange and MásMóvil does make it a particularly relevant event.
The merger will cause the resulting operator to have to return part of the excess spectrum among its remedies, but with the new maximums imposed, this can also be divided between Movistar and Vodafone, without other possible interested parties such as Digi having spectrum left to deploy a fourth network. with sufficient capacity. Not even one like the one built by Yoigo, and with which it manages to absorb 50% of the traffic.
The fourth operator is not a benchmark for having the largest deployment of networks or for offering the lowest prices.
But Yoigo (of the MásMóvil Group) has invested just enough in mobile networks throughout its history. It has a third fewer antennas than its rivals and much less spectrum. In other words, we do not owe Yoigo the coverage in more remote areas or indoors, nor the highest speeds in 4G, nor notable deployments of 5G.
The conclusion seems to have been that allowing the existence of a fourth operator did not imply having better networks, so it seems that the discourse of the traditional telecoms has ended up permeating. But now, what will happen to the prices that users pay?
Is there a risk of ‘oligopoly’?
With one less rival in the market, it is inevitable to think of further price increases and even fewer incentives to be aggressive with deployments. Situation that could be considered as oligopoly, but is there reason to worry?
In reality, the greatest drivers of the low cost mobile market have been precisely the MVNOs, those that are not dedicated to deploying networks, but rather rent or resell services. Digi is one of the current benchmarks, but there are much cheaper ones. So while the figure of the MVNO is assured, prices should continue to be controlled, as long as it is guaranteed that wholesale mobile services will not be affected after the reduction of competition in the deployment of networks.
ero Yoigo (from Grupo MásMóvil) has invested just enough in mobile networks throughout its history. It has a third fewer antennas than its rivals and much less spectrum. That is to say, I did not owe Yoigo