Telefónica accused of abusing dominant broadband position

22 Feb 2006

Telefónica will this week be formally charged for abusing its dominant position in the Spanish broadband market, reports the Financial Times quoting people familiar with the case. The charges are contained in a confidential document that will be sent by the European Commission in the coming days, suggesting the Commission has built up a strong case against Telefónica. The Commission’s anti-trust investigation has found that retail broadband prices in Spain are significantly higher than the EU average, with Telefónica accused of undermining competition by charging wholesale prices so close to retail prices that alternative providers are unable to mount a significant challenge to the incumbent. It also reports that the country is falling behind the rest of the EU in the construction of alternative broadband infrastructure, further cementing Telefónica’s dominant position. At the end of September 2005 Telefónica had a 54% share of retail broadband subscribers. Its closest competitor, Spaincom subsidiary ONO, had just 17% at that date.

Spain, Telefonica Espana (Movistar)