New WACC method to calculate prices for wholesale services

In Spain there are a number of types of oblique entry, all regulated by legislation and whose prices are established primarily based on completely different standards supervised always by the CNMC. Here we’ve got some “merchandise” corresponding to NEBA that’s utilized all through Spain to open Telefónica’s fiber networks to the competitors besides in:

Albacete, Alboraya, Alcalá de Guadaíra, Alcalá de Henares, Alcorcón, Alicante, Almería, Alzira, Arganda del Rey, Badalona, ​​Barcelona, ​​Burgos, Cádiz, Castellón de la Plana, Cerdanyola del Vallès, Córdoba, Cornellà de Llobregat, Coslada, Dos Sisters, Elche, Fuengirola, Fuenlabrada, Getafe, Gijón, Granada, Granollers, Guadalajara, Hospitalet de Llobregat, Huelva, Jaén, Jerez de la Frontera, Leganés, León, Lleida, Logroño, Madrid, Málaga, Mataró, Mislata, Móstoles, Murcia , Oviedo, Palencia, Parla, Paterna, Pinto, Reus, Las Rozas de Madrid, Sabadell, Salamanca, Sant Vicent del Raspeig, Sant Adrià de Besòs, Santa Coloma de Gramenet, Seville, Tavernes Blanques, Terrassa, Toledo, Torrejón de Ardoz, Torrent, Valdemoro, Valencia, Valladolid, Vigo, Vilafranca del Penedès, Vila-real and Zaragoza.

Spain fiber speed

New WACC method

The CNMC has established a new calculation methodology weighted common value of capital for the telecommunications sector. In addition, they’ve taken benefit of the decision that establishes it to calculate the WACC for fiscal yr 2020 in accordance to the brand new methodology. First of all, it have to be defined that WACC comes from the English Weighted Average Cost of Capital and that, in November 2019, it was adopted by the European Commission as a calculation method.

As we all know, the CNMC calculates this value every year for operators within the telecommunications sector topic to the fee accounting obligation, together with Movistar, Vodafone, Orange and Cellnex. The software of this method causes the WACC worth to endure a slight lower in contrast to 2019.

For instance, for 2019 it was 6.38% whereas for the yr 2020 that worth stood at 6.36%. The CNMC explains that this method might be used to decide the prices of various wholesale services. If we get hold of a decrease WACC we’ve got a decrease value of capital, which can trigger it to be carried over to the completely different regulated wholesale prices when they’re topic to evaluation.