Telefonica to Increase Minutes and Data

Telefonica will increase the volume of data and voice minutes included in its Spanish prepaid mobile bundles, starting in mid-September, according to a report. The company operates in Spain under the Movistar brand.

From 15 September, the cheapest Movistar monthly tariff of €10.00 (US $11.76) will offer 40 minutes of calls and 7 GB of data, up from 20 minutes and 4 GB. The intermediate tariff of €15.00 ($17.63) will offer 100 minutes of calls and 15 GB of data, up from 40 minutes and 7 GB. The top monthly bundle of €20.00 (US $23.51) will offer 150 minutes of calls and 25 GB of data, up from 80 minutes and 15 GB.

Telefonica, which last month launched a €5.00 (US $5.88) a month youth-oriented prepaid tariff, had 1.01 million prepaid lines as of 30 June, down 19.5 percent from a year earlier, compared to 15.28 million postpaid clients. 

In Spain, which was severely affected by Covid-19 this past spring, has experienced vigorous growth in the budget-oriented segment of the mobile market. Prepaid tariffs, having lower cost and less commitment, tend to appeal to budget-minded consumers.

Telefonica (Movistar) primarily operates in the postpaid market in that country, but its prepaid business has seen a fairly steep decline (almost 20 percent) compared to this time last year, measured in terms of number of lines in use. The pandemic has actually increased demand for prepaid service, due to the heavy economic impact and its effect on customers’ budgets. So, the fact that Telefonica has slipped in this sector is almost certainly due to the presence of effective competition from rival operators, including MVNOs.

So, Telefonica’s move to double or nearly double its allowance of voice and data on its existing prepaid plans is a significant attempt to meet this competition head-on and claim a bigger proportion of the growing budget-oriented market. These offers should prove effective to some extent, but there are still better deals available in Spain. For example, the low-cost MVNO Lycamobile offers 150 minutes (plus an extra 150 on-net minutes) and 40 GB of data for €20.00 month; for the same price Movistar offers 150 minutes and only 25 GB of data. The increases in allowances plus the new youth plan should help Telefonica be more competitive in the Spanish market as it now is, but the operator may have to offer even more to narrow the gap.

Tarifica is a global SaaS company and a market leader in the real-time collection, analysis and delivery of telecom plan and pricing data worldwide. Through a mix of AI, modeling and market expertise, Tarifica tracks hundreds of thousands of plan and pricing data points daily. No other company tracks more. Tarifica's mission is to continuously convert data into the dynamic intelligence that fuels opportunities for its clients, the world's leading operators, regulators and consultants.
Learn more about Tarifica at www.tarifica.com.

Telefonica Deutschland Launches O2 Cloud Storage Service

Telefonica Deutschland said that it will offer the new O2 Cloud Pro service, beginning on 3 March, for €4.99 (US $5.40) per month. The service offers unlimited storage on certified EU servers based in Ireland. Users can share data, tables and presentations by using a link protected by a password or just by an expiration date. 

The minimum contract term is one month, and the service is free the first month. The O2 cloud contract ends automatically when the mobile contract signed in conjunction with it terminates. Users can download data up to 30 days after the end of the contract. 

Also beginning on 3 March, the company will offer tariffs for small companies and self-employed subscribers with unlimited calls and texts from Germany to the EU. With the O2 HomeSpot4 and the O2 My Data Spot Unlimited tariff, O2 offers self-employed people a stationary high-speed internet connection as an alternative to the fixed network. Self-employed people who are existing customers can purchase the mobile Wi-Fi router together with the O2 my Data Spot Unlimited for €19.99 (US $21.66) a month.

Without trying to be all things to all people, there is a great deal that mobile operators, especially large ones, can do to increase their appeal to different kinds of subscribers and increase their overall relevance in an ever more diverse global marketplace.

Cloud storage services are one example of a value-added service that an operator can profitably offer its subscribers. Cloud storage is more and more popular relative to local hard drives, and while individual consumers may be satisfied with the storage that comes with their Gmail or Apple account, businesses are likely to need more. A small business or a home-based business operated by a self-employed person will be in the market for a low-priced offer with flexibility and convenience, and by making O2 Cloud Pro available to those who are not Telefonica subscribers, the operator is maximizing the reach of this offer. Of course, storage that is seamlessly linked to existing mobile accounts is likely to be particularly appealing, so O2 Cloud Pro will likely also be a force for subscriber acquisition. Telefonica Deutschland’s simultaneous offer of plans with hotspots for small businesses and self-employed users is in keeping with the focus on this client demographic.

O2 being the U.K. brand of the Spain-based parent company of Telefonica Deutschland, the branding of this offer under that name appears to be an attempt to broaden its target demographic to users in the U.K. as well as the EU, in light of the Brexit agreement having come into effect on 31 January.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  

To learn more about Tarifica, please visit www.tarifica.com 

Telefonica Germany Launches Speed-Based Unlimited Data Plans

Telefonica Germany announced the launch of a new set of O2 Free Unlimited tariffs, beginning on 4 February. The new plans are based on internet speeds. 

The O2 Free Unlimited Max offers unlimited data at the maximum available speed—up to 225 Mbps—for €49.99 (US $55.44) per month, while the O2 Free Unlimited Smart provides unlimited data at up to 10 Mbps for €39.99 (US $44.35) per month. These two plans are ready to be used for 5G, as well as 4G/LTE. The O2 Free Unlimited Basic plan offers unlimited data over 4G/LTE only, at speeds up to 2 Mbps, for €29.99 (US $33.26) per month. 

All three tariffs include unlimited calls and texts and EU roaming. They are also available in the Flex version, meaning that customers may cancel them at any time with 30 days’ notice by paying an additional €5.00 (US $5.55) per month.  

While most mobile tariffs base their data pricing structures on the quantity of data consumed, this suite of offerings from Telefonica Germany is unusual in basing it entirely on the speed of the data. Put another way, the operator is making a distinction between service tiers based on speed, while offering equal—indeed unlimited—amounts of data across all three tiers. This is interesting and potentially appealing in that it allows for all subscribers to O2 Unlimited service to have unlimited data, while still enjoying some freedom of choice as to their needs and the concomitant ability to keep the price down if desired.

The operator’s price structure is also designed to incentivize subscribers to take the higher tiers, given that a €10.00 (US $11.09) increase in cost per month gives one a fivefold speed increase from the bottom to the middle tier, while the €10.00 increase from the middle to the top tier delivers more than a twenty fold increase in speed. The plans are equal in other respects, with all three boasting unlimited calls and texts, as well as roaming in the EU.

In terms of how this offering will actually perform in the marketplace, one key question to be answered is how much users actually care about speed when it comes to mobile devices, or rather how much they care about this much speed, in the context of the coming of 5G. For a sizable contingent of users, 225 Mbps (download) will be overkill, so they will be content with 10 Mbps or 2 Mbps. For those users who really want or need 225 Mbps, 5G will be the way to go soon if it is not already, and with that ultra-high-speed service even higher speeds than that may be realizable. On the other hand, under the current offering even the middle (Smart) tier can access 5G, in which case the speed achieved may be much higher than 10 Mbps.

Another question is to what extent these speeds are notional rather than real. In other words, when advertising speeds “up to” a given figure, the operator may in fact be speaking of a best-case scenario that is rarely achieved. In any case, though, we feel that from a marketing point of view, the concept of distinguishing between unlimited-data offerings based on speed is basically a sound one. 

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  

To learn more about Tarifica, please visit www.tarifica.com 

Spanish Mobile Spending Up for First Time Since 2011

According to data released by Spain’s telecom regulator CNMC, the average amount spent by Spanish users on mobile services increased for the first time in five years in the first half of 2015, The average spend in the first half of the year was €16.50 (US $17.92) a month, up slightly compared to the €16.20 (US $17.59) spent in the second half of 2014, albeit still some €6.50 (US $7.05) less than the average monthly spend of €23.00 (US $24.98) corresponding to the first half of 2011. Spain was hit particularly hard by the pan-European economic crisis that began in 2007–2008, and its mobile market reflected the situation in the country as a whole. Massive unemployment led to a serious reduction in consumer spending on mobile services. Amid this decline, cutthroat competition among operators for what was left of the consumer base led to record churn and price wars. With spending, prices and revenue so far down, by last year it appeared as if the Spanish mobile market had nowhere to go but up, and now it appears that that has in fact been the case. Spanish consumers are spending more on data than in the past—in line with the global movement toward greater data consumption—and operators Telefónica, Vodafone and Orange have recently raised prices, and these two factors are largely responsible for the increase in spending in the first half of 2015. Although the amount of the increase is certainly not large, the fact that it occurred at all is an important indicator, and we believe it is very likely that the trend will continue.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. 

To learn more about Tarifica, please visit www.tarifica.com 

Regulator Threatens Telefonica With Fine Over Roaming Fees

Germany’s Federal Network Agency is threatening to fine Telefonica Deutschland for charging customers too much for roaming within the EU, according to a news report. Under new EU regulations, announced at the end of 2015, as of 1 May roaming fees must not exceed 5 cents per minute. Telefonica, however, is still charging many customers 20 cents a minute, which is has said it will reduce to 14.95 cents per minute for contract customers starting on 1 July. A spokesperson for the Federal Network Agency said that it would formally notify the operator that it must conform to the EU directive or face a fine.    The negotiations to end roaming surcharges within the EU by mid-2017 were complex and lengthy, but the European Commission has definitively ruled that it will happen and has mandated incremental reductions to accomplish the goal, and member states are charged with enforcing the rules. The German regulator’s threat against Telefonica is a clear indicator that the anti-roaming legislation is being taken seriously and that no prices exceeding the limits, even if applied only to certain customers on a legacy basis, will be tolerated. The writing is on the wall for roaming fees in Europe, and operators will have to adjust.  Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. To learn more about Tarifica, please visit www.tarifica.com

Tuenti Ecuador Launches Referral Offer

Spain-based international operator Telefónica has announced the launch of a friends’ referral scheme to help boost uptake of its Tuenti Movil MVNO service in Ecuador. Under the offer, any Tuenti prepaid customer can access their account online and send an invitation to friends via email, Facebook or Twitter. The friend who sets up a Tuenti account and as the friend who made the referral each receives US $5.00 in promotional credit. Tuenti Ecuador offers a series of data-focused prepaid plans, ranging from a 7-day bundle with 100 MB of data, 15 minutes of calls and 15 SMS for US $5.00 to a 30-day bundle with 400 MB of data, 60 minutes of calls and 60 SMS for US $15.00.

  

The MVNO market in Ecuador is in its infancy; when Telefónica, which operates under the brand name of Movistar there, launched Tuenti there in June 2015, it was the first MVNO in the country. There are currently no independent MVNOs in Ecuador. So while Tuenti has no direct competitors, it still needs to establish itself in a marketplace that is unused to such offerings. In order to distinguish itself from Movistar’s other offerings, as well as from those of competitor MNOs, Tuenti has emphasized the social media angle with unlimited zero-rated WhatsApp and Facebook usage. This brand identity harmonizes well with a socially driven promotion campaign such as this friends’ referral scheme, which operates via social media, as well as email. We believe that it is particularly persuasive, in that the amounts of credit received for a referral is quite large in the context of Tuenti’s prepaid tariffs, since it is equivalent to a week’s worth of services. In addition, the fact that both the referred friend and the one making the referral get a credit makes the offer even more attractive.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. To learn more about Tarifica, please visit www.tarifica.com

Telefónica Spain Pilots Mobile Video Delivery Platform

Spanish operator Telefónica is partnering with U.S.-based Opanga, a mobile video technology distributor, to pilot Opanga’s mobile-first video delivery platform with the country’s consumers. Opanga’s solution will enable Telefónica to gauge subscribers’ reactions to the mobile video services that it offers. “We expect Opanga’s technology will surprise our consumers with a completely new level of mobile video consistency and speed,” said Juan Ramón Martín, Customer Experience Manager at Telefónica Spain.

According to recent reports, mobile video is expected to account for a third of global mobile data traffic by 2016. By that time, at least 40 percent of smartphone owners will use streaming mobile video services. YouTube has been the main platform for video consumption, but in 2014 global mobile video viewing on Facebook increased by 75 percent from the previous year. While reports have indicated some deviation from this level of digital video viewing in some Western European countries, Spain shows signs that support the increased viewing trend. For example, in a comparison study that was carried out by the U.K. communications regulator Ofcom in October 2014, it was reported that 70 percent of internet users in Spain watch TV programs digitally, with 55 percent watching them on mobile devices.

In Spain’s highly competitive mobile market, the major operators are constantly devising strategies to help them increase or keep their position on the market. In addition to pricing offers affordably and to creating options that customers want, mobile operators have used the quality of their services as a differential in retaining and attracting customers. Mobile video services has emerged as a new area of differentiation for MNOs, and partnering with companies such as Opanga will enable them to provide such services at the highest level. It is also economically important for operators to offer these services without a huge increase in capital expenditures and without using a tremendous amount of spectrum. Telefónica’s ability to minimize these operating costs via Opanga’s platform will give it a higher revenue intake on its mobile video offerings.

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: Click here.

Google in Roaming Talks With Hutchison Whampoa

U.S. internet giant Google is said to be in talks with Hong Kong-based multinational telecom operator Hutchison Whampoa about gaining wholesale access to the latter’s mobile networks in the U.K., Ireland, Italy and several other countries. Google is understood to be planning to create a global network that will charge the same for calls, texts and mobile data regardless of the customer’s location. Describing it as a “small scale” project, Google previously announced plans to launch an MVNO relying on wholesale agreements in the U.S. and abroad. Neither Google nor 3 UK, Hutchison’s U.K. subsidiary, would comment on the matter.

In January Google announced plans to launch a U.S. MVNO running on two networks (T-Mobile and Sprint), and in March followed that up with an announcement that when the service debuts—originally set for March but now said to be within the next few months—it would initially be compatible only with the latest model of Google’s own Nexus brand smartphone. Compared to the potential agreement with Hutchison that is reportedly afoot, these are “small-scale” plans indeed. If the deal proceeds as projected, Google would be creating an international mobile cellular service that utterly ignores borders and, for its users in the included countries, would put an end to roaming as a concept. We have already written about the trend toward ending roaming in several regions, but this type of agreement could be a game-changer, given Google’s deep pockets and huge reach. And Hutchison, which is in the process of merging its 3 UK operation with Telefónica’s O2 to possibly become the U.K.’s largest mobile operator, would be a strong partner in such a venture.

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

Global Trend: OTT Services Taking Away Market Share

Mobile subscribers in Argentina sent a total of 10.11 billion SMS during February 2015, down 7.2 percent compared to the same months the previous year, according to the national statistics bureau Indec. Compared to the previous month, the number of sent SMS decreased 11.1 percent. This is an example of the global trend, visible in both developing and developed markets, of free or very low-cost OTT services taking market share away from mobile operators’ SMS offerings.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. Tarifica is a division of T3i Group, a diversified telecom information provider. To learn more about Tarifica, please visit www.tarifica.com.

Hutchison Whampoa Faces Uphill Battle in O2 Deal

After talks that began in January, Hutchison Whampoa on Tuesday announced its agreement to acquire U.K. operator O2, which is owned by Spain-based Telefónica for a total of £10.25 billion (US $15.2 billion). However, significant challenges from European Commission regulators lie ahead for the two companies. One key concern for competition authorities, of course, is the fact that a merger of Hutchison’s 3 UK with O2 would reduce the number of mobile network operators in the U.K. from four to three. Beyond that, the EC will have to consider whether the deal should be scrutinized only within the context of the U.K. market or within that of the EU market as a whole.

Any deal involving a reduction in competition in a given market is likely to face regulatory hurdles; this one is likely to face even higher ones than usual, or at least greater uncertainty. The question of jurisdiction is one reason. Since both Hutchison and Telefónica are multinational companies with operations in many European countries, major changes to their U.K. businesses will have ripple effects elsewhere, as well. The change in the composition of the EC within the past year is another “wild card” in assessing the deal’s chances. While similar mergers in Germany and Ireland were approved in 2014, the makeup of the Commission has changed since then. Additionally, those deals were green-lighted on condition that the operators in question open up spectrum for more MVNOs—a policy that would not constitute a remedy in the case of the U.K. market, in which there are already many MVNOs. And finally, the merger will have to be considered in light of another proposed merger in the U.K. announced within the last few weeks—BT’s agreement to purchase EE from Deutsche Telekom and Orange for £12.5 billion (US $18.6 billion). Unlike the 3–O2 deal, this one would not reduce the number of MNOs in the U.K., since it involves a fixed and broadband provider acquiring a mobile business to create converged services.

The above item appeared in 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 Spain to Launch 400 Mbps LTE-A in 10 Cities This Year

Orange Spain has announced that it will be launching LTE-A technology, capable of delivering sustained speeds of 300 Mbps and peak speeds of 400 Mbps, in 10 Spanish cities by the end of 2015. When it showcased the technology at the Mobile World Conference in Barcelona earlier this month, Orange claimed it reached the highest speeds yet seen in Spain by aggregating the 2,600 MHz, 1,800 MHz and 800 MHz frequencies (the 800 MHz frequency is due to be released next month). The LTE-A service will be expanded from Madrid, Barcelona and Valencia to seven other large cities—Seville, Zaragoza, Málaga, Palma de Mallorca, Murcia, Las Palmas and Bilbao—by the end of the year. Orange currently has approximately 2.3 million 4G customers, and the company confirmed that it remains on course to bring 4G services to 85 percent of the Spanish population by the end of year, including all localities with over 10,000 inhabitants.

We are a little skeptical about the utility of LTE-A, at least for consumers. Speeds in the hundreds of megabytes per second are not necessary for even the most data-intensive activities such as downloading movies. According to network testing firm OpenSignal, Spain already has the fastest mobile network speeds in the world, averaging 18 Mbps. Of the country’s operators, Vodafone came out the fastest of the eligible networks tested, with average speeds of 25.2 Mbps. Now, we understand that Orange may want to catch up, but speeds of 300 to 400 Mbps would appear to be a case of, to say the least, massive retaliation. Spain is experiencing rather severe economic problems right now, and that, combined with the fact that it is already the world leader in network speed, indicates that an LTE-A rollout in the country is not a good use of resources on the part of a mobile operator.

The above item appeared in 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

Mexico Kicks off Process for Wholesale Shared Network

Mexico’s Ministry of Communications and Transport has published a formal request for expressions of interest from companies and consortiums interested in designing, financing, deploying, operating and marketing a wholesale mobile telecommunications network. The project, a key part of President Enrique Peña Nieto’s campaign to boost competition in Mexico’s wireless market, is expected to require an investment of roughly US $10 billion. Under President Peña’s plan, the new network would be run as an independent “carrier of carriers” and would be available to any interested mobile service provider at regulated rates. The hope is that increased competition from this shared wholesale public network will translate to increased access to mobile and broadband service and lower prices for consumers.

The entire Mexican telecommunications landscape is in the process of overhaul. The country’s dominant mobile network operator, América Móvil, is now actively seeking to offload assets to get its 70 percent market share in the industry down below 50 percent, as now dictated by regulatory law. U.S. operator AT&T is continuing its expansion into Mexico; last month it reached an agreement to buy Nextel Mexico after having acquired Iusacell less than six months ago. If the deal with Nextel is approved, AT&T will surpass Mexico’s number-two operator, Movistar, and, as reported last month, might potentially pose a challenge to América Móvil. 

Add to all this the formal request for expressions of interest in building a huge telecommunications infrastructure, and President Peña is well on the way to boosting the competitive landscape of Mexican telecom. We think the sharing of infrastructure among possibly hundreds of mobile service providers is a smart way to go. More and more, competitors are becoming partners in order to lower the considerable investment required to build mobile infrastructure. With a decreased barrier to entry, the Mexican market should become more attractive to a new cast of players. The “carrier of carriers” concept is an efficient one; duplication of infrastructure is eliminated, risk is spread and prices can be more competitive. Therefore, everyone stands to gain.

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

Panasonic Launches MVNO to Provide Cloud-Based M2M Connectivity

At the Mobile World Congress in Barcelona last week, Japanese tech giant Panasonic Corporation announced the launch of a global MVNO that will operate initially over Vodafone’s network. Panasonic also plans to enter into agreements with other operators including Telefónica and Orange. Via its MVNO, the company will begin to integrate mobile connectivity across product lines, providing access to Panasonic’s new M2M cloud services. Connectivity will be offered on 3G and 4G networks, and customers can choose to have Panasonic host the service or do that themselves. Panasonic sees the MVNO playing a large role in its connected home technology, specifically in enabling heating and cooling services to be monitored and controlled remotely. It will also be used by Panasonic’s Nubo, a mobile-connected monitoring camera.

Over the past few years MVNOs have gone from simply providing connectivity and selling SIM cards to offering complete, end-to-end M2M solutions to business customers. It is for this reason that we are not surprised to see electronic manufacturers such as Panasonic plunge into the MVNO arena. Panasonic offers products and solutions in many of the verticals that use cloud-based M2M connectivity, so it only makes sense for the company to offer turnkey solutions that include connectivity. Traditional MNOs should take note as more large multinational companies create MVNOs of their own and offer connectivity services to their business customers, which in many situations—due to convenience and familiarity—will turn to their equipment and device suppliers for their M2M connectivity and managed business solutions.

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