direct-telecom

Disgruntled Telefonica customers and consumers at large have been crying out for years for companies like Direct Telecom to give them alternative telecommunications products at more competitive prices. Telefonica, on the other hand used its dominant position in the market to make sure that will not happen – especially in the case of ADSL – deliberately inhibiting the growth of its EU competitors and even forcing them to operate at a loss in attempt to match the telecoms giant’s ‘bulk’ prices.

Consumers have long been unhappy with Telefonica and its devious and manipulative ways that guaranteed it a virtual monopoly of the telephone and ADSL markets in Spain. It hardly comes as a surprise to anyone that Spanish consumers pay 20% more for ADSL Internet access than the average in the EU-15 group of countries, while ADSL penetration index is 20% lower and growth a whopping 30% lower. This means that Telefonica is sitting pretty raking in the cash by charging its current customers more, while not bothering to extend its services to areas without ADSL coverage and – to add insult to injury – preventing its competitors like Direct Telecom from filling in these gaps in the market.

Spanish consumers are not just very unhappy indeed. They’re furious! But now their plight against Telefonica has finally been vindicated by the EU, with the  European Commission slamming a 151.8 million Euro fine on Telefonica for its “very serious” and long-lasting abuse of its dominant market position. This massive fine is the second largest ever imposed by the European Commission, surpassed only by Microsoft’s 2004 EU fine – until now, sanctions had only been imposed on resellers of Telefonica’s products, Wanadoo and Deutsche Telecom, the company behind Ya.com.

Finally, a light has appeared at the end of the long dark tunnel of Spain’s telecommunications monopoly. At Direct Telecom, we look forward to the day when Telefonica will be forced to recognise and accept fair competition from other EU telecoms companies. This will hopefully spell the end of the artificially inflated prices that Telefonica is forcing upon begrudging Spanish consumers and will also make things easier for the many people who would rather not have anything to do with Telefonica in the first place.

Until this happens, we, at Direct Telecom will remain at the forefront of this battle, together with the majority of Spanish consumers, exerting pressure on the EU and Spanish authorities who have the power to bring about the much needed reform of Spain’s telecoms market.