As Telefonica announces to offer free internet calls throug O2, its UK operation, it amazes me why it has left its home market in search of others.   Shouldn’t be concentrating on providing a service in Spain?  First of all let’s look at the growth of intenret connection and use in Spain over the last decade.

Growth: According to the latest figures from Nielsen Online internet usage has increased in Spain from 13.2% in 2000 to 62.6% in 2010.  That is 29,093,984 users out of a population of 46,505,963.

This figure can be somewhat misleading as it is based on assuming that each person requires one internet connection.  Also it does not take into consideration the usage by companies rather it is usage by subscribers to the service. For example, while I have an ADSL at home, my wife and I use the same system and two of my neighbours access the same network occasionally.  So in fact there are 4 users to the 1 connection.  On the other hand at work, we have three separate ADSL connections 2 for 1 company and 1 for another.   This is spread between the several users, all of whom have their own ADSL at home.  Disregarding this irregularity and assuming that market penetration is only at 62.6%, it means a market growth of 539% since 2000, ie approximately a growth in the multiple of six times in 10 years or 53% per year.  One would expect that such a
huge market growth would bring in several changes and the most obvious ones
being to the provision of service and price.

Speed: While basic ADSL connection speed in the early 2000 was around 256kbps, it has now gone up to an average of around 6MB.  Currently standard ADSL offers are still
based on 1MB, 3MB and 6MB connection with only a few service providers like Ya,
Jazztel and ONO offering 10MB; 15MB and 20MB as their standard basic service.  These speeds are of course subject to geographical location and in many rural places or even coastal towns of Malagaand other regions the best you can get is only 1MB and that’s if you are lucky.

Spain as a country stands at number 36 in the world for its internet connection while Korea has  world has the highest average internet speed and plans on making it even faster at a gigabit per second. Not only does Korea plan to have this in every household by the end of 2012, but has already started testing it in select homes.

Price: Internet connection prices in Spain are amongst the highest in Europe and despite the market growth prices have not changed that much. While in Norway most people are ditching their landlines in favour of mobiles with internet connection plans averaging around €10 per month, ADSL subscription prices in Spain are still around the €40 per month range with the best offers being from Jazztel, Ya and Orange at around €20 per month for their lower speed connections of 1 upto 10 MB.

One of the highest fees often involved in the ADSL connection is that of the landline rental fee. Standard Telefonica rates are €17 / month including tax and adding the cheapest ADSL deal at €25 per month, you are looking at €42 / month for a landline and basic internet connection.   For a full comparative pricelist on ADSL prices from all providers visit:  www.electronbox.net/ADSLcompare.html

While the prices from the major providers are not necessarily competitive you will find that a fair few subcontracted deals are exactly what you are looking for.  For example you can get deals that includes the landline rental, ADSL connection at 3MB and includes national and European calls for as low as €42 / month.  This in comparison to deals from Ya or Jazztel that do not provide international call plans or charge extra is an unbeatable offer.

In the next article I will try to cover internet connection by mobile and wireless services.

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