May 27, 2009
There’s a new business model that really reflects the current economic conditions in Spain: If no one’s willing to pay for your service, give it away for free.
Orange Spain recently announced that all prepaid and postpaid customers will enjoy free calls between 8pm and 8am for any three months from May 16 to October 15. While postpaid customers can call free of charge any mobile or fixed number nationwide, Orange’s prepaid customers are limited to on-network calls. The duration of each call is limited to one hour, and the promotion is capped at 1,000 minutes. There is a one-time service activation fee of €6.95 for postpaid customers and €1.16 for prepaid ones.
Spain is one of the European countries most heavily affected by the global economic crisis. GDP is expected to contract by 4.1% in 2009 and another 1.1% in 2010. In this dismal economic environment, many telecom operators are facing declining service adoption and/or revenues. As pointed out in our recent Spain country intelligence report, the Spanish mobile market achieved a slight year-on-year growth in euros of 2% in 2008. The global economic downturn will continue to affect Spanish mobile market in 2009; we expect mobile service revenue growth to decline by 0.5% this year.
While some operators, such as Telefónica and Vodafone, focus on higher margins, others, such as Orange, have decided to focus on customer retention rather than service revenue augmentation. While Orange reported 52,000 mobile net adds in Q1 2009, it also reported declining mobile ARPS and thus a 5.4% year-on-year decrease in mobile service revenue. The three-month free-call program aims to retain Orange’s current customers and recruit new ones.
Orange Spain understands that revenue will likely continue to decline as long as the current recession continues. What it does not want to see in addition to that is an eroding mobile subscriber pool.
— Stela Bokun, Senior Consultant
Communications Markets in Spain
Country Intelligence Report published March 2009
Including IPTV services, the Spanish communications market generated €29.2bn (US$42.9bn) in service revenue in 2008. This makes it the fifth largest Western European market, following Germany, the UK, France and Italy. The main growth driver was fixed telecommunications, where VoIP, broadband Internet access and IPTV service revenues grew at annual rates of 150%, 12.4%, 8.2% respectively (in euro terms). This Country Intelligence Report analyzes Spain’s communications, media and technology industries, including key trends, regulatory pressures and the competitive landscape, making it an excellent complement to our Forecast products.
Spain Mobile Demand Forecast
Forecasts published March 2009
Updated on a quarterly basis, our Mobile Demand Forecast product provides a complete picture of demand trends for Spain. The Excel output includes five years of historical data and five years of market projections for metrics such as GDP, mobile penetration, subscriptions (by operator, type of package, technology), ARPS and total mobile service revenue (data and voice). The Forecast is based on extensive field research and uses the same consistent methodology we employ across all markets, aiming to capture the total spending, from an end-user perspective, on mobile communication services in the market.
Europe to See Huge Growth in Mobile Broadband Services despite Recession
Telecom Insider published May 2009
More than 10.7m new mobile broadband connections were added in Europe in 2008, compared with 6.5m in 2007. We believe that in spite of the economic slowdown, mobile broadband adoption will continue to grow relentlessly across This Telecom Insider analyzes the growth potential of mobile broadband computing in Europe, focusing on the three main factors affecting adoption: Networks, user devices and pricing. It looks in detail at the four markets that best represent the different regions of Europe: Poland, Russia, Spain and the UK.