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Policy Approaches towards Broadband Adoption in Spain

Policy Approaches towards Broadband Adoption in Spain Phoenix Center Workshop : Understanding Broadband Metrics, The Broadband Adoption Index. TELEFÓNICA INTERNACIONAL USA 15 July 2009. 01 Spain in the broadband benchmarks 02 Impact of socioeconomic factors in BB adoption

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Policy Approaches towards Broadband Adoption in Spain

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  1. Policy Approaches towards Broadband Adoption in Spain Phoenix Center Workshop: Understanding Broadband Metrics, The Broadband Adoption Index TELEFÓNICA INTERNACIONAL USA 15 July 2009

  2. 01Spain in the broadband benchmarks 02Impact of socioeconomic factors in BB adoption 03A successful policy approach focused on demand 04Regulation of supply is not the answer Index

  3. 01 The US is not the only country concerned about the OECD statistics When the OECD broadband portal was launched in December 2007 the Spanish Ministry requested the removal of the data for Spain asthe vast majority of broadband offers in the Spanish market also included voice calls and those bundled offers where not taking into account when comparing prices

  4. OECD Broadband subscribers per 100 inhabitants, by technology, December 2008 40 DSL Cable Fibre/LAN Other 35 30 25 OECD average 20 15 10 5 0 Italy EU 15 Spain Ireland Finland Belgium France Austria Greece Portugal Denmark Sweden Germany Netherlands Luxembourg United Kingdom Source: OECD 01 Spain does not perform well either when compared to the EU 15

  5. 01Spain in the broadband benchmarks 02Impact of socioeconomic factors in BB adoption 03A successful policy approach focused on demand 04Regulation of supply is not the answer Index

  6. 02 Several socioeconomic and demographic factors must be taken into account when considering broadband adoption (I) • 50% of adults aged 25-64 had only a primary education degree in Spain in 2006 compared to a 31% average in the OECD countries EDUCATION Sweden Spain Source: Enter, data from Eurostat

  7. OECD Broadband penetration (per 100 inhabitants), net increase, December (2007-2008), by country 4 3 OECD net increase 2 1 0 Italy Spain Japan Korea Poland Ireland Turkey Finland Iceland Mexico France Austria Belgium Greece Canada Portugal Denmark Norway Hungary Australia Sweden Germany Netherlands Luxembourg Switzerland United States New Zealand United Kingdom Slovak Republic Czech Republic Source : OECD 02 Several socioeconomic and demographic factors must be taken into account when considering broadband adoption (II) • Broadband penetration is growing over the OECD average but higher household size and growth in Spain’s population (doubling that of the EU 15 in the 2004-2008) make difficult to catch up DEMOGRAPHICS

  8. PC Installed Base 2008 1.400,0 1.200,0 1.000,0 800,0 PCs per 1,000 Households 600,0 400,0 200,0 0,0 Italy Japan Spain Ireland Finland France Austria Belgium Greece Canada Portugal Denmark Norway Australia Germany Sweden Netherlands South Korea Switzerland United States New Zealand United Kingdom 02 Several socioeconomic and demographic factors must be taken into account when considering broadband adoption (III) PC PENETRATION Source: Gartner

  9. 02 Increasing broadband penetration is not only a problem of infrastructure availability Not interested in having Internet access Do not have a computer Do not consider it useful Very complex/little knowledge of how to use it Do not have time to connect to the Internet Do not know what it is The price of the connection is too expensive Other Reasons for not having Internet at home (% answers). Source: Fundación BBVA, February 2008 The main reason for people not adopting Internet in Spain is the perception of lack of usefulness and need

  10. 01Spain in the broadband benchmarks 02Impact of socioeconomic factors in BB adoption 03A successful policy approach focused on demand 04Regulation of supply is not the answer Index

  11. 03 Taking all this into consideration Plan Avanza was launched in 2005 to foster development of the Information Society in Spain Principles of the Plan • Shared and voluntary effort • Agreement by all parties (national government, regional and local authorities, private organizations) • No additional regulatory obligations imposed on any player! • Public funds to support public and private initiatives • 5,076 M euro from the State budget • 188 M euro from regional authorities • 3,800 M euro invested by other organizations • Holistic approach, acting simultaneously to • Remove barriers that inhibit demand to develop • Fill gaps in supply • Government focusing in its active role as enabler and big customer

  12. 03 Simultaneous action on all fields, with special attention to demandstimulation Plan lines Main programs Eliminating barriers to demand Digital citizenship (families) • Loans to families and students • Telecentres • Senior and disabled inclusion programs Digital economy (companies) • ICT training • Soft loans • SME support • ICT R&D support Public administration enabler and leading user Digital education and public services • On line education • On line health • E-Administration • Electronic ID card Digital context • Broadband and mobile extension plans • DTT transition plan • Digital content support • Open software Supporting market filling of supply gaps

  13. 03 Results: demand has notably increased Actions Results • 730,000 workers trained • 101,000 SMEs and 179,000 families have received soft loans • 8,000,000 citizens have electronic ID cards • 12,000,000 rural area dwellers have access to training and the Internet via • 3,000 telecentres • 2,500 connected libraries x2 x4 Source: Spanish government

  14. 01Spain in the broadband benchmarks 02Impact of socioeconomic factors in BB adoption 03A successful policy approach focused on demand 04Regulation of supply is not the answer Index

  15. 04 BB Penetration vs Incumbent Market Share EU15 (%) 40% Denmark 35% Netherlands Finland 30% Sweden Belgium France BB Penetration (%) Germany UK Luxemburg 25% EU15 Spain 20% Austria Ireland Italy 15% Portugal Greece 10% 20% 30% 40% 50% 60% 70% 80% Incumbent BB Market Share (%) Broadband market share of incumbent operators does not impede market growth

  16. 04 Penetration vs Cable (%) 40% Denmark Netherlands 35% Finland Sweden 30% Germany UK Luxemburg Penetration (%) 25% France Belgium UE15 20% Austria Italy Spain Ireland 15% Portugal Greece 10% 0% 10% 20% 30% 40% 50% Total Cable / Total BB (%) Platform competition has stimulated broadband penetration…

  17. 04 Fiber Deployment: % of households passed 100,0% 89,5% 90,0% 75,0% 80,0% 68,0% 67,0% 70,0% 60,0% 60,0% 50,0% 40,0% 28,0% 25,0% 24,0% 30,0% 20,7% 18,0% 18,0% 17,0% 16,0% 15,4% 15,0% 14,5% 20,0% 13,0% 12,5% 11,7% 11,4% 11,1% 10,0% 9,0% 8,0% 5,6% 10,0% 4,4% 4,1% 3,0% 1,9% 1,8% 1,0% 0,2% 0,0% 0,0% FTTH/B FTTH/B FTTH/B FTTH/B FTTH/B FTTH/B FTTH/B FTTH/B FTTH/B FTTH/B FTTH/B FTTH/B FTTH/B FTTH/B DOCSIS 3.0 DOCSIS 3.0 DOCSIS 3.0 DOCSIS 3.0 DOCSIS 3.0 DOCSIS 3.0 DOCSIS 3.0 DOCSIS 3.0 FTTN/VDSL FTTN/VDSL FTTN/VDSL DOCSIS 3.0 DOCSIS 3.0 FTTN/VDSL FTTN/VDSL FTTN/VDSL FTTN/VDSL DOCSIS 3.0 FTTN/VDSL DOCSIS 3.0 DOCSIS 3.0 DOCSIS 3.0 FTTN/VDSL FTTN/VDSL FTTN/VDSL FTTN/VDSL FTTN/VDSL FTTN/VDSL Germany Belgium Denmark Spain France Italy Norway UK Sweden USA Japan S. Korea Nether. Switzer. … and will continue to do so for NGNs

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