Submarine Cable Iberian Peninsula-Gran Canaria: Telefónica subsidy amended in 2026

Key data

Connectivity between the Canary Islands and the Iberian Peninsula now has a new regulatory framework. Real Decreto 268/2026, of 1 April, amends RD 1124/2024, which regulated the direct award of a subsidy to Telefónica de España for the deployment of a submarine cable between the Peninsula and the island of Gran Canaria.

The project falls within the Connecting Europe Facility-Digital and is financed with European Next Generation EU funds, under the Plan de Recuperación, Transformación y Resiliencia. Its objective is to strengthen telecommunications interconnections across the national territory, improving connectivity for the Canary Islands.

What does this regulation establish?

RD 268/2026 amends RD 1124/2024, of 5 November, which was the original regulation governing the direct award of the subsidy to Telefónica. The amendment affects the conditions or terms of that award, although the regulation does not publicly detail the exact amounts or the specific articles changed relative to the original text.

The structural elements of the project that remain unchanged are as follows:

• Beneficiary: Telefónica de España
• Purpose: deployment of a submarine cable between the Iberian Peninsula and the island of Gran Canaria
• European framework: Connecting Europe Facility-Digital
• Financing: Next Generation EU funds from the Plan de Recuperación, Transformación y Resiliencia
• Modality: direct award, without a competitive tendering process among operators

The previous regulation, RD 1124/2024 of 5 November, established the basis for this subsidy. The new decree adjusts its conditions, which may imply changes to execution timelines, justification conditions, amounts or technical requirements, although these specific details are not available in the published data.

Economic and operational impact

The impact of this amendment occurs on several levels:

For Telefónica de España: as the direct beneficiary, any change in the subsidy conditions may affect its financial and operational planning for the project. Changes to timelines, amounts or justification requirements have direct consequences for the execution of the cable deployment.

For the telecommunications sector: the direct award modality — without competitive tendering — is a relevant factor. Other operators in the sector do not have access to this financing for equivalent projects, which may create competitive asymmetries in the telecommunications infrastructure market.

For the Canary Islands economy: the resulting infrastructure is strategic for the territorial and digital cohesion of the archipelago. Greater submarine interconnection capacity improves the quality and resilience of telecommunications services for Canarian businesses and citizens, with a direct impact on sectors such as tourism, digital services and commerce.

Who is affected?

• Telefónica de España: direct beneficiary of the subsidy and responsible for deploying the submarine cable.
• Other telecommunications operators: indirectly affected by the direct award modality, which excludes competition for these funds.
• Companies based or operating in the Canary Islands: especially those that depend on high-capacity connectivity for their operations (technology, tourism, financial services, e-commerce).
• Citizens of Gran Canaria and the rest of the archipelago: ultimate beneficiaries of the connectivity improvements the infrastructure will provide.
• Next Generation EU fund managers in Spain: the amendment of conditions for a direct subsidy of this scale has implications for monitoring and justification before the European Commission.

Practical example

A technology company based in Las Palmas de Gran Canaria that provides digital services to clients on the Iberian Peninsula depends on the capacity and resilience of submarine connections to guarantee the quality of its services.

With the deployment of the new submarine cable financed through this direct subsidy to Telefónica, that company could benefit from greater transmission capacity, lower latency and greater redundancy in connections between the Canary Islands and the Peninsula. This translates into greater operational reliability and the potential to reduce costs associated with service interruptions or degradation.

On the other hand, a telecommunications operator competing with Telefónica that wished to access equivalent public financing to deploy similar infrastructure would not have access to these funds, given that the award is direct and does not go through an open tendering process.

What should companies do now?

1. Telecommunications operators: review the full text of RD 268/2026 and RD 1124/2024 to identify which conditions have changed and assess whether there are competitive or regulatory implications for their business.
2. Companies in the Canary Islands with high connectivity dependency: monitor the submarine cable deployment schedule, as the infrastructure improvement may open opportunities to expand or enhance their digital services.
3. European funds advisors and consultants: analyse the new conditions of the direct subsidy to understand the justification and monitoring model required under the Plan de Recuperación, Transformación y Resiliencia.
4. Regulatory departments in the telecoms sector: assess whether the direct award modality without competitive tendering is subject to analysis or challenge before the competent regulatory bodies.
5. All those affected: consult the official source in the BOE to access the full text of the decree and learn the exact details of the amendments introduced.

Official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, please consult a qualified professional. Source: https://www.boe.es/diario_boe/txt.php?id=BOE-A-2026-7446