The CNMC:

The National Markets and Competition Commission (CNMC) has launched a public consultation on the new proposal for the regulation of the business communications market, the so-called Market 4. And it has done so, noting that Telefónica continues to have a very strong position in this segment versus your competitors.

In a statement, the regulatory authority has explained that it is a fundamental market for competition in the retail communications market for the business segment, especially for large companies and public administrations that have the need for advanced data services and to communicate multiple locations in a virtual private network.

Telefónica’s revenue share in the business segment retail market has gone from 69% to 62.9% in recent years. Although Telefónica’s share has decreased since the previous review, approved in 2016, it is still high and is a long way from its competitors.

“For this reason, the CNMC proposal is continuous with current regulation, maintaining the obligation to provide the two wholesale services in this market, essential to compete in the business market,” says the regulator.

On the one hand, it must provide the high quality wholesale broadband service, called NEBA Empresas. “The prices of lines lent with copper pairs will continue to be cost-oriented and those of lines lent with fiber will be subject to an economic replicability test, consistent with the obligations imposed on Market 3, says the CNMC.

On the other, it must provide the service of rented terminal lines (ORLA). Thus, the prices of leased lines with a traditional 2 Mbps interface will continue to be cost-oriented and those of lines provided with Ethernet interfaces (10/100/1000 Mbps) will be subject to an economic replicability test.

The CNMC points out that, unlike the regulation of Market 3, it considers that the competitive situation of this market does not justify the application of a geographically segmented regulation with differentiated obligations. “Therefore, Telefónica must provide the wholesale services of the ORLA and NEBA companies throughout the national territory,” it states.

The regulator explains that the market analysis also includes a review of ORLA prices. It is proposed a reduction of 33% in the prices of the traditional lines of 2 Mbps and a reduction of 17.2% in the prices of the Ethernet lines of 10, 100 and 1000 Mbps.

In addition, the CNMC indicates that the obligations of access to the civil works infrastructure of Telefónica (MARCo) are maintained. In other words, operators can use MARCo, in addition to carrying out large FTTH deployments in Market 3, also to directly provide leased lines and business broadband services to end customers.

Interested parties now have 25 business days to present their allegations for public consultation. After analyzing the comments received, the CNMC will approve a draft measure that will be sent to the European Commission, as well as to the Ministry of Economic Affairs and Digital Transformation.

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