Movistar, Vodafone Spain Lose 80,000 Customers in January

Spanish MNOs Movistar and Vodafone Spain shed 46,500 and 33,000 mobile customers, respectively, in January, mostly to Jazztel and low-cost MVNOs, according to the monthly survey reported on the website ADSL Zone. Orange Spain, which is in the process of acquiring Jazztel, shed a net total of 16,000 customers in the first month of the year, although its low-cost brand Simyo offset that figure with a net gain of 16,400 customers. Jazztel attracted 37,000 more mobile customers with the success of its fixed-mobile convergent packages. Ono, which was acquired by Vodafone in July, gained 15,000 mobile customers, but Spain’s fourth-largest mobile operator, Yoigo, continued to shed customers, losing some 9,000 ported numbers. Vodafone’s new low-cost MVNO brand, Lowi, also had a positive first month, having attracted around 10,000 customers since its launch on 18 December 2014.

Spain’s mobile market is notorious for its high churn rate, driven in large part by the country’s dire economic straits. While many markets in both the developed and developing worlds have too many MVNOs and are poised for a contraction, in Spain it appears that the MVNO sector is enjoying robust health and posing a growing challenge to the MNOs. In the case of MVNOs wholly owned by MNOs, such as Ono, Simyo and Lowi the former threaten to cannibalize the latter. As Orange prepares to acquire Jazztel, that phenomenon is likely to be repeated. In Spain, low cost and flexibility rule, so MVNOs are carrying the day. For MNOs, the best strategy seems to be not to beat them but to join them.

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

Orange Offers to Buy Jazztel

French multinational telecommunications company Orange has made a €3.4 billion (US $4.4 billion) cash offer to acquire Spanish broadband provider Jazztel, valuing it at €13 (US $16.83) per share, which Orange said was 22 percent more than Jazztel’s closing price on the Madrid exchange on 12 September and 34 percent more than its average price over the past 30 days. The deal is subject to regulatory approval, and also to Jazztel’s shareholders tendering at least 50 percent of the stock, on top of an almost 15 percent stake held by executives—including chairman Leopoldo Fernandez Pujals—who have agreed to sell. This acquisition move, which had been rumored since February, would be Orange’s biggest such attempt in nearly a decade and would allow the operator to provide converged fixed and mobile services in Spain. It would thereby place Orange, currently the third-largest MNO in Spain, in a significantly improved position relative to its chief rivals, Telefónica and Vodafone. (The latter company acquired a broadband provider of its own, Ono, in July.) If the deal goes through, Jazztel would bring with it 1.5 million broadband subscribers, causing the resulting entity to be the second-largest broadband provider in Spain. Orange clearly hopes that the acquisition will boost it to the number-two spot among Spanish MNOs, as well. It projects that a takeover of Jazztel would generate revenue and savings amounting to €1.3 billion (US $1.68 billion). “Orange and Jazztel together, that’s the combination of two success stories in Spain,” said Orange CEO Stéphane Richard. “With the economy recovering, it’s the right time to reinforce our presence.” There is a pre-existing synergy between the two companies—Jazztel also offers MVNO services which run on Orange’s network, and it would bring a further 1.5 million mobile customers with it. Fixed-mobile convergence is an active trend in Europe, as well as in other developed markets where competition is intense, and Orange is clearly embracing it in its search for a competitive edge.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

134,000 Spanish Customers Changed Operators in April

Spain's four leading operators—Movistar, Vodafone Spain, Orange Spain and Yoigo—lost 82,000, 34,000, 1,600 and 14,000 mobile customers, respectively, in April. Most of these went over to MVNOs such as Ono and Jazztel, according to an industry survey. Yoigo in particular was hard hit, losing nearly twice as many customers in April as it did in March.

   Customer dissatisfaction with MNOs continues to grow in Spain, a country whose mobile market has been particularly afflicted by churn in recent years. The MVNOs are posing an increasingly strong challenge to the traditional mobile operators, attracting customers with competitively priced packages that offer convergent fixed-line broadband and mobile services. 

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx