109
2013
Annual Report
1
Introduction
Although there are signs of a better socio-economic outlook, 2013 was still generally similar to recent years,
due to the continued drop in demand and cost-cutting initiatives in all sectors, particularly in the sector where
Euskaltel, S.A. operates together with large multinational competitors, i.e., the telecommunications sector. In
addition, and particularly in 2013 major operators have been pushing prices down, by clearly promoting
convergent products.
In this converging environment, Euskaltel has been able to compete and successfully rise to the challenge, as it
has an exceptional technological infrastructure, has been adequately prepared for convergence for a number of
years, and has an equally exceptional knowledge of its potential, its products in the market and its customers.
Although it has been unable to avoid the effect of the drop in market prices, the economic variables of
Euskaltel have performed better than those of its environment and sector, thanks to its customers and its
proven capacity to generate the efficiencies required by its customers when being billed.
Together with convergence and efficiency, broadband market customers are now demanding more ultra high-
speed capacities, partly because the simultaneous use of diverse and increasingly sophisticated devices is
becoming more commonplace. Mobile phone customers meanwhile are now increasingly requiring SIM Only
products, where low tariffs are justified by the absence of low-cost terminals, which in turn has driven up sales
of unlocked phones, also available under financing schemes.
Business performance of Euskaltel in 2013
Customers/Products
With respect to fixed-line telecommunications services, Euskaltel has 385,608 direct access lines at the 2013
close, which represent a 0.2% growth in a market that has been sliding progressively in the last five years (-
1.5% in 2013) and an improvement in the composition of the lines portfolio, with direct access lines
representing 98.5% of total fixed telecommunication lines compared to 98% in the prior year. Broadband lines
contracted with Euskaltel totalled 259,987 lines at the end of 2013, representing year-on-year growth of 4.1%.
As for Euskaltel’s Digital Television service, at 31 December 2013 there were 62,274 value products, reflecting
a 13% rise and maintaining a penetration of over 40% with respect to direct access customers.
Consequently, Euskaltel remains the primary alternative operator in terms of market share of fixed-line
telecommunications customers in the Basque Country, with levels of penetration in the different businesses
higher in net terms than those of the leading, alternative, own network operator in the country. In fixed
telephony Euskaltel is co-leader in the market, with a 47% share in the Basque Country where it has its own
network. As for broadband services, Euskaltel is the leading operator in the Basque market, with a 43% market
share. In Digital Television, Euskaltel is the leading operator in the market with a share of almost 60%.
In mobile telecommunications, Euskaltel ended 2013 with 362,292 active mobile phone lines, reflecting a net
increase of 32% in value customers (contract customers), in a year in which once again the number of active
lines of established operators nationwide has continued to drop in favour of VMOs. However, Euskaltel has
made great strides, increasing its market share by over 3 percentage points to 18% of contract lines.
