Yettel Bulgaria recently launched a promotional campaign that will offer new users a 50% discount on the monthly price of its home internet plan for the first six months, to customers who sign a two-year contract. The offer is only available for Yettel’s FWA plans which rely on the operator’s mobile network. For Yettel’s most affordable 5G plan, the first six months of the contract comes in at BGN 7.99 (US $3.98) per month for those with another service subscription to the telecom and BGN 9.99 (US $4.98) per month for those who only get home internet.
Offering such a steep monthly discount, even if only for the first quarter of a two-year contract, is likely an indicator of two headwinds facing the provider. First, it is possible that this is a tactic to encourage adoption of Yettel’s FWA plans. Before the launch of 5G, these offers, which compete with traditional fixed broadband plans, were either not available or typically performed quite poorly. As mobile networks improve, FWA represents a potentially lucrative source of additional users for MNOs. First, however, operators need to convince customers that this service is worth trying. Deep initial discounts likely represent an attempt by Yettel to lure in initial users.
Second, Bulgaria appears to be quite a competitive market for ISPs. In this type of environment where consumers are bombarded with a constant stream of promotions, customer retention is critical, even if this comes at the expense of ARPU. These contracts, incentivized by their deep promotional discounts, represent Yettel’s attempt to lock up its users for years to come.