Low cost continues to take over large operators: it will capture half of operator changes in 2024

Price continues to be the main factor that moves Spaniards to choose their telephone company, which is translating into increasingly accelerated growth of low-cost operators in Spain. In fact, they are expected to account for 53% of registrations next year.

According to a report on consumption patterns in the sector by the consulting firm Oliver Wyman, 46% of Spaniards are considering changing operators soon and price is the most important thing for them.. The report also states that more than 40% of customers who plan to change companies will do so from a traditional operator to a low-cost one, while only 12% plan to go the other way.

The perspectives drawn by the report from the prestigious strategic consulting firm are not particularly rosy for the large European operators, with the Spanish brands in this segment being the main losers.

Although the firm does note a drop in the number of total operator changes that are taking place in Spain, compared to the records of previous years, it also warns that Spain is below the rest of the European countries in terms of penetration of this type of operators compared to traditional ones.

“In an inflationary context, in which some operators have also raised prices in the last 12-24 months, households seek to adjust their spending. The report shows a clear European trend in favor of low-cost mobile operators that is accentuated in Spain,” says Beatriz Lacave, partner of the Telecommunications, Media and Technology industry at Oliver Wyman.. Furthermore, the expert adds that a certain “captivity” is also seen in the low-cost customer: when they switch to an operator with these characteristics, it is very rare for them to return to the customer list of a traditional operator.

While in Spain, this type of low-cost companies do not exceed 34% market share in any age cohort, in Germany, almost half of people over 55 years of age have their mobile services contracted with a low-cost operator. cost, while the percentage of those under 35 years of age who trust this type of company exceeds 40% in that country, France and Italy, compared to 32% who do so in Spain.

This is due, the firm explains, to the fact that in Spain the percentage of users who have a convergent package, that is, one that combines the connection at home with the mobile rate in the same offer. An element that could put an end to this advantage for large operators is that their low-cost rivals also offer these services, unlike in the rest of European countries, where telephone companies with the lowest prices limit themselves to selling mobile rates. .

The consultancy's diagnosis is quite uniform in the markets it addresses (Germany, France, Italy and the United Kingdom, apart from Spain) and agrees that traditional players are seeing their position in the market eroded due to the push of this type of operators. , with the sole exception of Germany.

In this sense, the firm's experts conclude that one of the problems is that the connectivity offer between both actors is increasingly similar, with the only exception of pay television and own audiovisual content, a field in which, in In the Spanish case, low-cost players such as Digi and other market disruptors such as Avatel are also arriving.

For their part, the large Spanish operators have also chosen to protect themselves by reviving subsidies to the terminals, an element that increases customer loyalty, bound by contract for the duration of the financing to the operator.. To counterattack, operators such as Avatel itself and Parlem have closed agreements with Rentik, the terminal rental company of the Dominion group, which is gaining increasing weight as a partner for managing the device strategy of smaller operators.

The end of the year is traditionally a month of a large number of operator changes and in which terminals play a fundamental role due to Black Friday and Christmas campaigns and the launch of new terminals from companies such as Apple and Google.