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RealTime IT News

Spain's Retevisisn Joins "Flat" Fate Fracas

[Madrid, SPAIN] Spain's second-largest telecom operator was the latest to join this month's "flat" rate war with its announcement this week of cheaper nightly Net use.

Along with its Internet portal eresmas.com, Retevisisn announced a flat rate fee of 2600 pesetas (US $15) applicable from 6 p.m. to 8 p.m.--the time period Telefsnica (which rents its lines to third party operators) offers discounted calls. The plan, which goes into effect on July 1, also includes 30 minutes in national long-distance calls.

While the Spanish government was in the midst of developing its own flat rate plan, the private sector rate war began on June 15 when Arrakis, BT's Spanish Internet affiliate, announced a nightly (8 a.m to 8 p.m) Net use rate of 4950 pesetas (US $28.50). Arrakis Barra Libre was set to begin operation on June 26. BT's investments in Spain include 140 billion pesetas (US $807 million) for an alternative telecommunications infrastructure consisting of 10,000 kilometers of fiber-optic cable.

The Spanish Congress's approval yesterday of major liberalization measures allows for competition in local telephony and establishes a maximum "flat" rate (US $15.80) companies can apply. Not quite the flat rate consumers demand, it goes into effect on November 1 and will be valid from 6 p.m. to 8 a.m. on weekdays and all day on weekends.

"The problem is that the network is in the hands of one single operator [Telefsnica]," said Miguel Pirez, president of the Spanish Internet Users Association. "Only the person with the network can adopt a flat rate."

While many Netizen advocates blast the government plan as a false flat fee, Periz at least sees an advantage in establishing an upper rate limit under which companies may compete to bring lower rates and expand hours of discount use.

"We also think it's positive that we're starting to talk about data and voice treated as one and the same," said Perez. "We're starting to talk about discount coupons that work for both voice and data. It used to be that you'd get these coupons valid for Internet on one hand and voice on the other."

Nonetheless, the nocturnal discounts leave out major institutional users.

"A minority of heavy users might find some advantage in the new scheme, but for the majority (schools, for example) will find 3,000 pesetas a month for nighttime connection to be both excessive and useless," said an El Pams editorial, "even if the government insists on calling this call savings plan for hardcore users and night owls a flat rate."

When adjusted for income level, Spaniards pay among the highest phone rates in Europe. The country of 40 million now has four million "habitual" Internet users.