Euskaltel has extended its coverage to all Catalonia, in the northeast of Spain, adding 2.4 million homes.
Through its subsidiary RACCtel, Euskaltel has launched a convergent package with 500 Megabytes, unlimited phone calls and 20 Gbps at €40 a month with no tie-in clause.
Its national expansion is causing concern amongst existing operators who fear that it will give rise to a price war in the optic fibre market with operators launching low cost offers.
Movistar, Orange, Vodafone and MasMovil are reportedly preparing themselves to mitigate the effects of low cost offers by Virgin with aggressive marketing campaigns.
Through Virgin, Euskaltel aims to become the fifth largest telco operator in the country. The company has already started its expansion into Aragon, Catalonia and Castilla y León.
Competition in the market is likely to intensify with existing operators warning of a possible risk of losing investments.
“With this level of wild competition, we run the risk of not being able to continue with the same type of investment over the next years”, said Antonio Coimbra, CEO of Vodafone.
Even Movistar and Orange are calling for a consolidation in the market.