Telefónica Germany has announced the addition of 5G access to its S, M, and L prepaid tariffs. As part of a promotional campaign valid through 05 September, new subscribers signing up for the prepaid M tariff will enjoy 18 GB of data for the first four weeks, up from the standard 12 GB. This data package, including unlimited calls and texts, would come a discounted price of EUR 14.99 (US $16.14), with top-ups after the promotional period running at the regular price of EUR 17.99 (US $19.37). S plans offer 6GB for EUR 9.99 (US $10.76), and L plans provide 18GB for EUR 19.99 (US $21.53), with regular prices after the first four weeks coming in at EUR 12.99 (US $13.99) and EUR 22.99 (US $24.76), respectively.
Vodafone and Deutche Telekom have been offering 5G for prepaid plans for a while, and with this move, O2 Germany hopes to join the movement to capitalize on the growing demand for 5G services in the prepaid market.
Tarifica’s Take
O2 Germany’s decision to extend 5G access to prepaid plans follows a pattern previously observed in the industry, where operators seek to introduce customers to the benefits of 5G while paving the way for future monetization. By offering new prepaid subscribers an increased data allowance at a promotional price, O2 aims to use the allure of 5G capabilities to attract customers.
However, a closer examination of O2’s promotion reveals a common trajectory in the market. Many operators initially provided 5G access without additional charges, creating an opportunity to upsell premium 5G packages later. However, as we have seen, this strategy presents a potential risk of customers becoming accustomed to 5G speeds at existing prices. Indeed, the pricing structure for O2’s prepaid plans in LTE remains the same when 5G is included. The similarity in pricing suggests that, if they don’t have an exit strategy already in place, O2 may ultimately face the same challenge facing other operators of effectively monetizing 5G services.
As the telecom industry continues to evolve in the 5G era, O2 Germany’s activation of 5G for prepaid plans presents an opportunity to witness, in real-time, as the delicate balance between attracting customers with enhanced services and implementing sustainable business models plays out.