January 18, 2021

Competition asks Telefónica to lower the wholesale price so that its offers to homes can be replicated by its rivals



The National Commission of Markets and Competition (CNMC) has urged Telefónica to lower its fiber optic wholesale prices by at least 4.8% so that its competitors can replicate their retail offers, the supervisory body reported in a statement.

Through a specific test, the CNMC periodically evaluates whether the prices set by Telefónica in its wholesale services on its fiber network – NEBA local and NEBA fiber – allow alternative operators to offer their customers the same products offered by the company chaired by José María Álvarez-Pallete at the same price.

This monitoring seeks to ensure a high level of competition in the market, according to the CNMC, which has recalled that the prices of NEBA local and NEBA fiber are freely set by Telefónica, with the only condition that they must pass the replicability test. The supervisory body periodically reviews the parameters of this test to update the list of Telefónica’s benchmark retail offers and the underlying costs used in it.

In its third review, the CNMC has added the Fusión O2 600Mb product to the list of “flagship products”, in which until now it had not been included. According to the same source, all flagship products have passed the replicability test, with the exception of Fusión Base 600Mb, mainly due to “an increase in promotional intensity, which is very relevant for this product.”

For this reason, the CNMC has resolved to urge Telefónica to reduce the wholesale prices of NEBA local and NEBA fiber to the point where the test is passed. The concepts that Telefónica can modify are the access fee, or the service subscription and cancellation fees.

The company has 15 days from the notification of the resolution to modify the wholesale prices and to achieve the passing of the test, the average reduction must be at least 4.8%, according to the same source.

On the other hand, the CNMC has decided to review these prices annually, instead of every six months, in order to provide more stability to the prices of NEBA local and NEBA fiber and also more regulatory certainty, both for Telefónica and its competitors.

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