Mobile operator Orange Spain has started bundling a range of smart watches with the purchase of specific smartphones. The operator announced the following bundles, all of which require a subscription to the Whale plan, its largest (unlimited voice minutes and 5 GB of data), which costs €39.95 (US $49.56) per month: Customers who purchase the Samsung Galaxy Note 4 can purchase the Galaxy Gear S for €6.00 (US $7.44); the Sony SmartWatch 3 is available at no cost to customers who purchase a Sony Xperia Z3; and the Motorola Moto 360 and LG G Watch R are also free with the purchase of an LG G3 smartphone.
Although Spain has one of the largest mobile markets in Europe, the number of mobile subscribers there has been declining since 2011, due to the economic crisis. According to recent reports, Orange is the second-largest operator by a small margin over Vodafone—11.53 million subscribers versus 11.5 million. As we have written before, in such a competitive market operators need to be innovative and aggressive in order to maintain or increase their subscriber base. With these new bundled offerings, Orange has chosen to push its high-end plan by including a wearable device in the package rather than by reducing the plan’s cost. The launch of this offer, to coincide with the upcoming Christmas holiday, is well-timed. A report presented in November 2014 by the Center for Retail Research stated that 2014 will be the first year that wearable devices will have a significant economic impact on the European market, with Spain ranked the third country in terms of sales. According to the report, the upcoming holiday season will drive yearly revenue produced from the country’s wearable sector to €199 million (US $246.9 million). By being the first of Spain’s operators to bundle wearables in its contract plans, Orange will lead in capturing revenue these devices can generate through data use and connectivity.
“Operators providing services in markets that are experiencing economic turmoil—such as several countries in southern Europe—need to create plans to meet their subscribers’ current expectations. In many cases these target specific user groups, and as long as those offers are innovative, they can become a good source of revenue. Spanish MVNO Happy Movil, for example, offers a wide variety of low-cost plans. At the other end of the spectrum, Orange Spain is bundling wearable devices with its highest-end plan. With this approach, operators are targeting specific customer groups that will at least create some more revenue, if not the larger amounts that would be generated in better economic times.”
Edyta Krzton, Senior Analyst at Tarifica
The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx