Telefonica's Spanish 4G launch gets closer with network-building deal

Telefonica, the largest mobile operator in Spain, will finally get its own 4G network thanks to a contract with Alcatel-Lucent.
Written by Steve Evans, Contributor

Telefonica has fired the starting gun on the rollout of its 4G network across Spain. The operator said on Thursday it had signed a deal with French networking company Alcatel-Lucent to install 8,000 4G LTE base stations across the Spanish mainland and islands.

As well as the base stations, Alcatel-Lucent will be providing Telefonica with a project management platform, as well as systems integration and maintenance services.

The companies didn't put a figure on the deal but the Wall Street Journal claimed the contract is worth around $300m and, according to Alcatel Lucent, is the largest contract it's signed in Western Europe. The multi-year contract will be shared with Ericsson, the WSJ said.

Alcatel-Lucent and Telefonica carried out two test deployments — one in Madrid and one at the Mobile World Congress in Barcelona — before finalising the deal, the companies said.

Until its own 4G LTE network is up and running, Telefonica will use the 4G network belonging to smaller rival Yoigo. The two signed a network-sharing agreement earlier this summer, which also gave Yoigo access to Telefonica's national broadband infrastructure and enabled it to offer fixed-line internet access and TV alongside its wireless services.

Telefonica is the last of the major Spanish mobile operators to offer 4G services, which can offer download speeds up to 10 times faster than 3G. Its main rivals — Orange, Vodafone, and Yoigo — all launched their services this summer, leaving Telefonica, the largest vendor, stranded. 

The company — whose mobile brand in Spain in Movistar — has been suffering over the past few years as the Spanish economy continued to decline. In the first quarter of this year, Movistar lost around 700,000 subscribers as people increasingly switched to low-cost rivals such as Yoigo and MVNOs such as PepePhone.

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