Vodafone continues its unstoppable commercial decline. The purchase of the operator by Zegona for 5,000 million euros, announced last September, not only has not been a positive change, but has worsened its recovery expectations. The Spanish subsidiary of Vodafone lost 598,000 customers in 2023 at the hands of its rivals due to the portability procedure, which allows any user to change companies for free, keeping the number. The British firm was, by far, the one that performed the worst this year: Movistar lost 273,000 lines and Orange gave up 185,000. On the winning side, the Romanian operator Digi stands out once again, taking away 766,000 customers from its competitors. MásMóvil held the line, with 57,000 lines carried in its favor, according to provisional figures to which EL PAÍS has had access, pending the audit of the National Markets and Competition Commission (CNMC).
Faced with this plummet in the customer portfolio, Zegona has carried out an unusual movement in recent days, with the request to Brussels to force MásMóvil and Orange to transfer retail clients (fiber and mobile) and wholesalers to Vodafone to authorize the merger of both firms. A request that has almost no chance of succeeding because, in practice, it would mean a forced “expropriation” of the customer base of its rivals and, what is more serious, it would violate the contractual rights of MásMóvil and Orange subscribers, and their right to freely choose with whom they contract their telecommunications services, according to sources in the operation.
The fierce competition in the sector telco It worsened in the last year. Inflation continues to crush households who, faced with the rise in services and products over which they have no control such as food or fuel, seek to reduce expenses on basic consumption such as telephone bills and Internet connections. In this irrepressible propensity towards savings, Digi has been one more exercise in the champion of low cost. Its unbeatable and simple rates, and its customer service with its own staff (without subcontractors like the rest of the operators), both call center and installation, allowed it to snatch 476,500 mobile lines and 121,500 fiber lines from its competitors. Although far from this performance, the behavior of MásMóvil is also commendable, which, although it only gained 1,000 mobile lines, managed to snatch 50,000 Internet connections, the most valuable because they are usually associated with convergent fiber and mobile products, with higher monthly spending. .
Movistar continues to lose steam and when the merger of Orange and MásMóvil is completed it will no longer be the first operator by number of customers. Telefónica's commercial brand lost 56,500 mobile lines and 216,500 broadband lines in 2023, a worrying figure for the latter because its commercial strength is based precisely on the most valuable customers. Orange gave up 175,000 mobile lines and left only 1,000 fiber connections.
Bad evolution since October
Although by law Zegona cannot interfere in the management of Vodafone until the acquisition materializes, scheduled for the first quarter of 2024, the messages they have launched from the bottom about the new commercial direction they intend to give to the company, more oriented to compete in the market low cost, are not bearing the desired fruits. “The most urgent thing is to be sure that the business is once again attractive to the consumer, because it has been losing customers for three or four years. So my first priority is to get these customers back to the brand and to Lowi,” said Zegona president Eamonn O'Hare in a recent interview with The world. The message seems not to have penetrated. On the contrary, customer flight has accelerated since Zegona announced the purchase. Vodafone has lost 200,000 lines in the last three months of the year, coinciding with the Christmas campaign, the most active, despite the aggressive commercial promotions carried out by the operator with the white comma on a red background.
In this context of significant loss of subscribers, Zegona has not hesitated to request the European Commission to force MásMóvil and Orange to transfer both retail (homes and companies) and wholesale (network rental to other operators) customers to Vodafone. An unusual request in this type of process, both formally and in the argumentation. And the fact is that the request does not quite fit with the current phase in which the merger process is – the market test—which focuses on asking the opinion of the different market players to find out what they think of the remedies agreed (conditions). In this case, about the agreement that MásMóvil and Orange have reached with Digi to rent the mobile network at an advantageous price and sell 60 megahertz (MHz) of radio spectrum.
It was precisely this agreement that prompted Zegona's request, which demands compensation from Brussels in view of the fact that Digi will emerge stronger after the operation. A requirement that clashes with the fact that, on the one hand, the European Commission has already said that the merger would have no relevance to the retail market and, in the wholesale case, the remedies They cannot favor the third operator, as is the case of Vodafone. Furthermore, it is surprising in the sector that Zegona requests this transfer when Vodafone Spain did not previously make any claim to Brussels. “This is a desperate request, because it has no sign of succeeding. Neither because of the procedural moment in which it occurs nor because of the depth of the measure that, in practice, would mean an expropriation of the most valuable asset that a service company has, such as its client portfolio,” say sources from the sector.
The European Commission has set February 15 as the provisional deadline to make a decision on the merger between Orange and MásMóvil in Spain after paralyzing the process at the end of last July.
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