Under the terms of the agreement, Vodafone and Orange will each deploy street-level fibre (horizontal infrastructure) in complementary geographies. The fibre will be owned independently but will share the same technical specifications to ensure compatibility as a single network, and each partner will have guaranteed access to the whole infrastructure. The companies will also each deploy their own in-building fibre (vertical infrastructure), guaranteeing access to each other, and will together request access to any third-party vertical infrastructure, notably that operated by Telefonica.
Orange said the two companies had been negotiating independently for some months with Telefonica on access to the in-building vertical infrastructure, but had yet to come to a satisfactory agreement. They want regulator CMT to set a cost-based price for access. They are also seeking extension of the existing wholesale Ethernet broadband access regulation (NEBA) to services above 30Mbps, calling for "economic conditions that permit competition on the retail fibre market".
The commercial service from Orange and Vodafone is expected to launch in January 2014, with an initial 800,000 homes covered by March of that year. Coverage will gradually expand to 3 million homes and businesses by September 2015 and 6 million by 2017, giving a residential penetration of around 40 percent. Capital expenditure to meet the coverage target is estimated at EUR 1 billion.
The operators said the agreement is also open to third parties willing to co-invest, and they will discuss with the regulator commitments to ensure equal access. These include sharing vertical infrastructure at prices based on actual cost, effective access to Telefonica’s ducts to facilitate rapid, mass deployment of horizontal infrastructure, and measures to obtain necessary administrative permits in a timely manner.
Vodafone and Orange already work together since 2006 on sharing mobile network infrastructure in Spain. Orange first introduced fibre broadband services in 2010 in Madrid and Barcelona, as part of its unbundled offer. The company had 1.44 million internet customers in Spain at the end of last year. Vodafone also offers unbundled ADSL services in Spain and counted 772,000 customers at the end of 2012.
