Vodafone Spain has announced a significant reduction on the price of its mobile plans with all-you-can-eat data, one day after Movistar Spain (owned by Telefónica) launched its first unlimited consumer data offers. Movistar reduced the price on its new Contrato Infinito unlimited data plan from €39.95 (US $43.40) a month to €24.95 a month for 12 months, and Vodafone then cut the price of its premium Ilimitada Total plan to €24.95 (US $27.11) a month from the standard price of €49.95 (US $54.27).
Both plans come with unlimited calls and SMS plus data at the highest possible download speeds, including 5G where available. However, after the 12-month period is over, Vodafone’s plan will cost €49.95 a month, compared to €39.95 for Movistar’s.
Over the past two years, all-you-can-eat data offers for consumers have proliferated in the Spanish market. The first to enter, in 2018, was Yoigo, the country’s fourth-largest MNO, owned by Másmóvil. That was followed by unlimited-data plans from Vodafone Spain (2019) and Orange Spain (2020). Movistar, the first-ranked Spanish operator, introduced an unlimited offer for business customers only, in late January of 2020. Contrato Infinito, the consumer unlimited plan that it launched on 20 April, marks its entry into the field.
Vodafone, Spain’s third-largest operator, has responded with great rapidity to Movistar’s move, countering one day later, on 21 April, with a comparable offer, called Ilimitada Total. The standard price of Contrato Infinito is €49.95 a month, but Movistar is offering a promotional price of €24.95 a month to customers who switch to the operator’s postpaid service from prepaid or port their number from another operator by 30 April.
The counter-offer from Vodafone is certainly competitive in the sense that—at least on paper—it provides the same unlimited data plus unlimited calls and SMS, as well as 5G access wherever available. As a way to keep existing customers in its ecosystem by removing the temptation to migrate to Movistar, it seems like quite a good idea. Of course, undercutting Movistar on price rather than matching its price would be even more effective in attracting new subscribers, and offering some plan features or add-ons that add distinction would also be more powerful and persuasive. Nonetheless, quickly matching a competitor’s offer is a legitimate strategy.
However, the fact that the eventual cost of Vodafone’s plan will be €10.00 a month higher than Movistar’s is a potential concern. The operator can perhaps count on the fact that subscribers will be thinking more about the immediate cost savings than about what will happen in 12 months’ time, but especially now, with the global pandemic going on, consumer spending habits are likely to be more conservative. Ultimately, of course, when it comes to unlimited data offers, much depends on the real-world performance of the networks.