Hispasat’s Failed Bid to Connect Rural Spain
In early 2023, the Ministry of Economic Affairs and Digital Transformation initiated the UNICO Rural Demand program. Its goal was ambitious: connect 1.3 million homes and businesses in rural Spain to the internet through Hispasat’s satellite services. However, two and a half years later, the outcome has been overshadowed by disappointment and underachievement. What went wrong?
The Promise of Connectivity
The UNICO Rural Demand program aimed to provide a robust internet connection—100 Mbps at a cost of €35 per month—to regions lacking access to networks of at least 50 Mbps. With a substantial budget of €76.3 million in aid, it seemed like a promising solution for rural connectivity issues in Spain.
From Objectives to Realities
The initial vision was to ensure that by 2025, the entire population of Spain would have access to reliable 100 Mbps internet. However, the actual implementation has fallen drastically short. After almost three years, only 11,486 installations have been completed, rendering the initiative a striking failure against its lofty aspirations.
Initial Challenges
The government awarded Hispasat—a company recently acquired by Indra—the contract to deliver the wholesale service. With 42 companies designated for distribution and installation, optimism was high. However, it soon became apparent that significant problems were brewing. Eurona, which was supposed to handle a majority of installations, filed for bankruptcy and divested its Spanish assets, severely disrupting the service rollout.
Lack of Support from Major Telecoms
While the program’s intentions were noble, large telecommunications companies have not stepped up as expected. They preferred to push their fiber or rural 5G solutions over Hispasat’s service, knowing that profitability was limited. Major player Telefónica has contributed only 10% of registrations, while small local firms like Celver and Bluetel have managed to register twice that number.
Competing Against Technological Advancements
Adding to Hispasat’s troubles is the presence of Starlink, a satellite internet service known for its superior technology and pricing. For just €29 a month, users can access up to 300 Mbps with significantly lower latency than Hispasat’s offerings. With Hispasat’s latency nearing 600 ms, activities like video conferencing and online gaming are nearly impossible, making Starlink a far more attractive option.
The Aftermath of Failure
The program has faced such severe setbacks that Hispasat has had to return €22 million of the public aid disbursed. Of the initial funding, €36 million was allocated for registration costs while the remaining €40.3 million was earmarked for marketing efforts. Dishearteningly, a mere 11,486 installations were executed out of 128,120 eligibility checks.
Rural Spain: Connectivity Challenges Persist
The failure of UNICO Rural Demand compounds issues faced by other initiatives, including the UNICO 5G Active Networks program. Prevailing obstacles have marred these efforts to extend internet infrastructure in rural locales. In 2024, this initiative plans to allocate €161.3 million to enhance 5G coverage in smaller towns, potentially enabling 326,000 residents to access better connectivity.
In conclusion, the vision of Hispasat as the “Spanish Starlink” has met with disheartening results, underscoring the challenges of providing reliable internet to underserved communities. As projects evolve, lessons must be learned to avoid repeating past mistakes and to foster genuine connectivity changes across rural Spain.