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MADRID, March 22 (Reuters) - Wholesale broadband prices setto be charged in Spain by former monopoly Telefonica may be too high to allow other players in the sector to compete,the country's main competition watchdog said on Friday.
Sector regulator CMT has proposed that Telefonica charge 8.6euros a month to competitors for unbundled broadband access,compared to an average of 9.23 euros in other Europeancountries, and 20 euros a month for fibre networks, according tothe report by Comision Nacional de la Competencia (CNC).
"The CMT in many cases proposes high wholesale prices...Those prices could reduce the competitive power of thealternative operators that use Telefonica's network, which couldresult in higher prices and worse service for consumers," thereport said.
The CNC is the highest competition body in Spain, overseeingsector-specific watchdogs but the final decision on prices is upto the CMT after such consultations.
Last week France Telecom's Orange and VodafoneSpain said they would invest up to 1 billion euros in ajoint fibre optic network in the country to deliver superfastInternet to 6 million homes.
Telecom operators in Spain face tough competition as rivalscut prices to attract cash-strapped consumers, and revenues fromfixed-line broadband have been falling since mid-2010.
Total revenues for the telecoms sector dropped 8.8 percentin 2012 to 7.2 billion euros ($9.31 billion).
The CNC warned that the prices fixed by the CMT meanTelefonica's rivals were less likely to have the financial meansto roll out alternative networks.
Telefonica is currently dominant in the ADSL and fibre opticmarkets and has also managed to reverse a trend of sheddingbroadband customers with a "quad-play" package includingtelevision, fixed line, mobile and broadband services launchedin October.
