Jorge Abril-Martorell, leader of the Telecommunications practice and partner at Arthur D. Little Spain (ADL), participated in the Rural Digitalization presentations organized by Asteo Red Neutra during the XVI Aotec Technology Fair to talk about the prospects in the Spanish market for local operators.
According to Abril-Martorell, the current context of high interest rates, rising inflation and difficulty in attracting financing at affordable prices – contrary to what we have experienced in the last decade – has resulted in a slight global slowdown.
Despite this scenario and the increasing competition from wholesale businesses, the telecommunications sector will return to growth thanks to the increase in end-customer tariffs.
The ADL partner clarified that the price of connectivity in Spain is one of the most competitive at European level. “The market is giving more for less by going from a total telecommunications market size of 31.7 to 29.7 billion euros in the last ten years, but it is offering greater quantity and quality in the penetration and delivery of services at very tight prices.” In retail services it has gone from 26 to 24 billion euros, while in the wholesale section it has remained more or less stable in terms of revenues with 5.5 billion euros. “It is a very relevant and very resilient segment, but it has stopped growing.”
“There are more and more wholesale network offers, there is more competition. This allows a scenario in which operators can dedicate themselves to taking care of their customers and disengage from the networks, using third-party infrastructures.”
Jorge Abril-Martorell (ADL): “In 10 years the penetration of local operators will double the current one”.
Good prospects for local operators
For Abril-Martorell, there is a lot of supply and a high level of connectivity on a national scale. In this situation , the focus will be on churn (the rate that measures the number of customers who unsubscribe in a given period of time).
While in the local arena there is still room for connectivity to be covered. “In ten years, the penetration of local operators and the volume of connectivity will double what it is today. That is, as long as they do not lose their DNA, which has made them a local operator, a local champion, of proximity”.
Local operators have the opportunity to “think about what they want to do for the future and, above all, what infrastructure they want to use tomorrow”.
In this context, Abril-Martorell explained that the local operator must abstract itself from all the uncertainty and possible movements occurring in the national territory and set its roadmap with a lot of discipline and obsession to systematically improve all the connectivity part.
The differential value of the local operator
Local operators have differential aspects that are difficult for national players to achieve, one of which is a close relationship and knowledge of the market. This translates into quality of service, an issue that is also closely linked to the network.
“Operators have to evaluate very well if they have the right network and/or if they should modernize it. Or just use third-party networks, as a neutral operator, and specialize in what they do well: end-customer commercialization, marketing, treatment and care.”
A great opportunity that local operators have is the development of the B2B offer, “a market traditionally more neglected by the national operator and there is really no competition in B2B at the local level” and to strengthen everything related to the digitization of the different administrations.
In conclusion, Abril-Martorell expressed his optimism regarding the future of local operators, where those who bet on quality and do not lose their essence will be the winners.
