Spain's Euskaltel Unveils Expansion Plans

In what will be seen as an ambitious move, or one designed to make it an attractive takeover target, Spanish regional broadband services firm Euskaltel has announced plans to offer its services to more than 1 million additional homes in five new markets and, ultimately, says it could expand to reach 10 million homes across the Iberian country.

Euskaltel is a small player in the scheme of things, operating mainly in the northern Basque region of Spain, where it has about 570,000 residential broadband customers and passes about 2.3 million homes. National operator Telefónica, meanwhile, passes more than 19 million homes with its fiber access network and has more than 6 million fixed broadband customers.

Euskaltel's annual revenues run rate is currently about €700 million (from all of its services) but it turns a small net profit each quarter.

Now it wants to be bigger -- much bigger -- and notes that it could pass 10 million homes in the future, thanks mainly to its agreement to access the fiber network being rolled out by Orange Spain , which also provides Euskaltel with wholesale mobile network services.

Its initial plan is to reach more than 1 million additional homes this year in five markets: In León and Cantabria through its R brand, using Orange Spain's fiber access network (200,000 homes); in Navarra and La Rioja with the Euskaltel brand (235,000 homes); and in Catalonia through the recently announced RACCtel+ joint venture with automobile club RACC (600,000 homes).

"We consider the expansion to new markets as a natural step in our consolidation project as one of the main Spanish operators, always placing our clients at the center of the business," noted CEO of the Euskaltel Group, Francisco Arteche, in the company's announcement about its expansion plans.

The news follows a report in Spanish newspaper El Economista that Orange Spain is mulling a takeover bid for its partner Euskaltel. For more on that, see this article from Digital TV Europe.

— Ray Le Maistre, Editor-in-Chief, Light Reading, special to Broadband World News.