Movistar Spain (Telefónica) has extended a data-led promotion for its prepaid customers for another month. The offer, which approximately triples the data bundles of its three prepaid plans, will now be available for both new activations and top-ups until the end of May.
As a result, the company’s Prepago Plus plan will come with 30 GB of data (up from 10 GB) plus unlimited calls and 200 minutes to 45 countries for €10.00 (US $10.74) every 28 days. The Prepago Premium plan will have 50 GB of data (up from 20 GB) and unlimited national calls plus 400 minutes of international calls for €15.00 (US $16.11) a month, while the Prepago Total plan will include 95 GB (up from 35 GB) and unlimited national calls for €20.00 (US $21.48) a month.
Telefónica had 752,500 prepaid clients at the end of December 2021, down 15.3 percent from a year earlier, compared to 15.2 million postpaid clients.
Tarifica’s Take
Clearly, prepaid is a tiny percentage of Movistar’s overall business. Nonetheless, the operator is making an aggressive attempt to save it in the face of significant losses. More than 15 percent of business lost in one year is an alarming figure, and it appears that tripling the data without increasing the prices of the prepaid plans is the current strategy for staunching the bleeding, if not necessarily rebuilding the sector.
Why would Movistar be so eager to save a small and seemingly unimportant customer base? First, on general principles, the company would not want to see deterioration in any aspect of its operations, no matter how small. Beyond that, though, it is likely that the loss in prepaid subscribers has been due to competition from budget-oriented MVNOs or possibly budget sub-brands of rival major operators. Movistar executives may be worried about MVNOs moving in on their postpaid business in time, and therefore the attempt to fend them off should start with the prepaid.
Finally, prepaid business, although not large, is reliable and secure—for the very reason that payment is made before services are consumed. In light of all this, a triple-data giveaway is not too onerous a sacrifice for this operator in the effort to save a beleaguered customer category.