Movistar Argentina, a subsidiary of Telefonica, has cut the price of its unlimited text and data offer by 40 percent to ARS 3.9 (US$0.74) per day. Customers can sign up for the promotion on a weekly basis via SMS. The operator introduced the price cut after receiving over 500,000 votes in favor of doing so through an online community it launched at the beginning of May, and by which customers can interact with each other and with Movistar.
While it is nice for an operator to establish an online community to help generate ideas and respond to customer concerns, we do not like the idea of putting subscribers in charge of determining prices. In less than four weeks, the pressure on Movistar built to such a point that it had to drastically lower rates, and we see no reason why such pressures will not continue. Keeping abreast of trends by using social media to connect with customers and improve service is in theory a good thing, but Movistar has placed itself in an awkward and potentially vulnerable position. At some point the operator will have to either ignore the feedback or stop soliciting it. This is a self-imposed dilemma that should have never occurred.