Close on the heels of signing a deal to buy Spain's largest
cable operator Ono,
Vodafone Group plc
), announced that it will commercially start offering
fiber-to-the-home (FTTH) service in the country from April.
Vodafone's partnership with
) has a large part to play in the rollout of fiber broadband in
Spain. The British telecom major will launch the service in
several areas of Barcelona, Madrid, Seville, Malaga Valencia and
Zaragoza initially using the FTTH network it has built with
Subscribers can select from two different fiber plans offering
download speed of 100MB/sec or 200MB/sec. They can also opt for a
bundled plan, which comes with 66 MB of mobile data, 200 minutes
of voice calls, free wireline calls to peer landlines and a
download/upload speed of 100MB/10MB respectively.
Notably, last year, Vodafone and Orange agreed to invest
nearly €1 billion or $1.3 billion for the FTTH network program.
Both companies will have access to each other's broadband lines
that will be laid out based on the same technical specifications.
This will enable the total infrastructure to function as a single
To further strengthen its fiber optic network, both Vodafone
and Orange inked a deal with rival
) in Jul 2013, to use the network of the latter to deploy faster
broadband service for its customers. However, Vodafone has to
catch up to rival Telefonica, which is a clear leader in the
Spanish market with its widespread fiber optic network.
But Vodafone is not solely relying on the new FTTH network to
provide the high speed broadband service. Recently, the company
reached a deal to buy Madrid-based Ono for €7.2 billion
(approximately $10 billion), which has 1.9 million customers in
Spain covering 70% of the population and can offer broadband
speeds of up to 200 MB/sec.
We believe the new FTTH network together with the Ono deal
will save Vodafone's expansion cost along with reducing line
renting from Telefonica.
Vodafone currently carries a Zacks Rank #3 (Hold). A
better-ranked stock worth considering within this sector is
SK Telecom Co Ltd
ORANGE-ADR (ORAN): Free Stock Analysis Report
SK TELECOM CO (SKM): Free Stock Analysis
TELEFONICA S.A. (TEF): Free Stock Analysis
VODAFONE GP PLC (VOD): Free Stock Analysis
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