Spain's Retevision Unravels Local Loop

Retevision, a member of the Auna group, has been offering long distance fixed telephony services since 1998, but its decision this week to provide local telephone service has pierced the last monopoly stronghold of the incumbent operator, Telefonica de Espaqa.

In a country where local calls are charged, Internet users are accustomed to exhorbitant phone bills. Retevision began offering limited "flat rate" Net access in 1999 (other operators soon followed) though these services still depended on Telefonica's infrastructure. Until an across-the-board U.S.-style flat rate is offered, observers say, Net access will largely be a reflection of local phone costs.

While still the Spanish telecom champ by a longshot, Telefonica is seeing some erosion in its fixed telephony customer base. While the former state monopoly still controls 94 percent of local telephone service, a growing number of traditional line and cable competitors have reduced that market share to less than 75 percent in some regions.

Retevision's campaign to woo new customers now includes one thousand free minutes of local telephone use for the token price of one euro. According to the company, callers who make local calls using a special prefix will save 28 percent by avoiding Telefonica. The former monopoly's Bono Ciudad plan currently offers Netizens and voice callers a special rate of EUR 4.20 for 600 minutes.

"Full competition means greater accountability to the public," said Canos. "Retevision will approach this new goal through loyalty to its clients, offering them new products capable of meeting ... their real needs."

Retevision, with more than three million Spanish customers, offers fix telephony, Internet and data services. The company is controlled by Telecom Italia and two Spanish power utilities, Endesa and Fenosa. The Auna group also offers Internet access and content, digital television, mobile telephony and other IT services.

After Telefonica, Retevision's biggest competitor is Jazztel (Spain's third operator and Portugal's second operator). Jazztel is wiring the entire Iberian Peninsula with the aim of becoming the leading provider of high-band Internet access to small and medium businesses peninsula-wide.