EconomyFinancialGoodbye Telcel, hello Movistar. Telefónica attracts more customers with...

Goodbye Telcel, hello Movistar. Telefónica attracts more customers with its phone plans for less than 500 pesos

Telefónica has managed to conquer customers who are looking for a telephone plan –or rent– for less than 500 pesos. In the first quarter of this year, the Movistar operator reached 1.81 million subscriptions in this modality, which means a growth of 17% compared to the same period last year.

The addition of new users to Telefónica’s telephony plans, in addition to those that AT&T managed to attract, promoted the recovery of the postpaid segment, that is, those lines that are subscribed to a telephony plan. This despite during the period.

In the first quarter of this year, this segment managed to exceed pre-pandemic levels after almost two years, reporting 21.1 million lines compared to the 21 million that existed in the same period of 2020. “This is the first period in which Postpaid subscriptions exceed the levels observed in the last period before the pandemic (first quarter of 2020). Previously, only prepaid figures had been above the levels of the first quarter of 2020,” says the report by the consulting firm Telconomia.

Jesús Romo, director of the Telconomia consultancy, explains that the recovery of postpaid lines is due to the economic reactivation since users have less uncertainty about their income, which allows them to look for accessible telephony plans.

“People are opting for rental plans that seem appropriate to them according to their income, this despite the fact that we associate recharges with flexible schemes, but the counterpart is that recharges already have a shorter validity and the plans have the advantage that users already have control month by month how much they are going to pay”, says Romo.

The arrival of Covid-19 in the country in 2020 caused users to cancel their phone plans due to the fact that they did not need to download data as they were in the home office mode and the decrease in family income due to reduced salaries and the trend of layoffs. In contrast, consumers opted more for making telephone recharges.

Fernando Esquivel, director of market research at The Ciu consultancy, estimates that the positive trend of postpaid lines will continue this year, despite the inflation currently being registered in the country, due to the fact that telephone services mobile tend to be below inflation.

As of March this year, 130.3 million mobile subscriptions were registered, of which 84% correspond to prepaid and 16% to postpaid.

Telefónica pays more postpaid lines

Since the Covid-19 pandemic arrived, the company has faced a decrease in market share in the mobile segment, which could be associated with less commercial dynamism. The company has gone from having a market share of 21% at the end of 2019 to 18.4% at the end of 2021.

However, despite losing users, especially in the recharge segment, Telefónica has managed to pay more postpaid customers in a quarter, even much more than its competitors Telcel and AT&T. The company has targeted the base of the pyramid of users, whom it has conquered with rental plans ranging from 265 pesos to 419 pesos.

However, it is the telecommunications operator that has the least participation in line plans.

In the first three months of this year, the company of Spanish origin reported 1.81 million postpaid subscriptions, which means an increase of 17% more than in the same period last year and almost 10% growth compared to the last quarter. of 2021.

Esquivel considers that the increase in Telefónica’s postpaid base is due to its unlimited data plans that allow its customers to use voice services (minutes), messages and data indefinitely and have it in the control mode.

Telefónica México decided in 2019 to return its radio spectrum to the State due to the high financial burden it represented to focus on cleaning up its finances. The company is about to conclude the process, after which it will operate on the infrastructure of AT&T and Altán Redes.

AT&T robustece planes

The company of American origin managed to pay some 4.81 million new subscriptions to its postpaid segment this quarter, which represents 1.8% more than the same quarter of the previous year.

For Jesús Romo, the addition of postpaid lines for the company chaired by Mónica Aspe would be associated with the fact that it has opted for plans that give users discounts, as well as personalized rents through its ‘Arm it’ model, where users can Generate your plan according to your needs.

Telcel purges user base

During the first quarter of this year, Telcel had a drop of 39,000 postpaid lines, which means 0.3% less than in the same period of 2021. Carlos Slim’s company closed with 14.52 million subscriptions. Telcel, a subsidiary of América Móvil, has registered a downward trend in this segment since the Covid-19 pandemic began in 2020.

Experts believe that this trend is due to the fact that Telcel has changed its strategy to focus more and more on the top of the pyramid, which will be the first to migrate to 5G technology.

Analysts believe that Telcel has begun the purge of its subscriber base to keep only those with the highest consumption, since currently its Average Revenue per User (ARPU), that is, what customers spend on mobile telephony, is the most highest of all telephone companies as it is 162 pesos, while AT&T’s is 132 pesos and Telefónica’s is 61 pesos.

One of Telcel’s big bets now that it has launched its 5G is that this new technology will allow it to increase its ARPU to generate more revenue in its mobile segment.

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