Euskaltel keeps calm and carries on with network expansion

Spanish regional operator Euskaltel said government efforts to slow the spread of COVID-19 are not expected to delay its national expansion plan, even as it implements measures to support employees and customers during the health crisis.

Euskaltel said earlier in March that it expects to double revenue (to €1.3 billion, or $1.4 billion) and increase customer numbers over five years through a new expansion strategy that will see it offer services under a trademark license agreement to use the Virgin brand in Spain. The operator renewed wholesale network agreements with Orange Spain and Telefónica in December 2019.

The Virgin brand is to coexist alongside the regional brands Euskaltel, Telecable and R, and forms a key component of plans to expand into the 85% of the Spanish market where Euskaltel is not currently present. The aim was to kick off the expansion plan in the second quarter of 2020. Although the situation has clearly changed since the plan was first announced, Euskaltel appears adamant it will maintain its schedule, although it did hint that this might not be the case if the state of emergency in Spain is prolonged much beyond April 11.

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In the meantime, Euskaltel said close to 100% of its employees are teleworking, although it also said 70% of its stores are still open. Its network is also said to be operating normally, despite huge spikes in traffic. For example, fixed broadband traffic increased by 40% in recent days, while mobile voice traffic grew by 50% and television consumption by 30%. At the same time, mobile data traffic has been stable as people use home Wi-Fi services instead.

In 2019, Euskaltel reported revenue of €685 million ($758 million) and EBITDA of €345 million ($382 million). The five-year target for EBITDA is average annual growth of 6% to reach around €500 million ($553 million). The number of fixed-line customers is expected to multiply by 2.3 to in excess of 1.5 million customers, while mobile customers are forecast to triple to 3 million by 2025.

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— Anne Morris, contributing editor, special to Light Reading

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