The rise in prices in telephone packages breaks records and reaches 6.2% so far this year

The rise in prices reflected by the INE contrasts with the pressure and promotional aggressiveness still present in the ‘low-cost’

Packaged telephone services They have raised their prices again in April and add up to an increase of 6.2% so far this year, the highest in the historical series, according to the National Institute of Statistics (INE).

At this price increase mobile telephony has also been addedwhich scores another rise of 1.1 points for a total rise in the first four months of 2023 of 3.4%, driven by the price increases carried out by the three main operators during the first quarter.

The push of the telecommunications sector is a new ingredient that contributes to inflation in 2023, since in the last three years the prices of the sector had only fallen due to the hypercompetitiveness of the market.

In fact, mobile telephony continues to be 3.3% cheaper than in April 2022, after the price of these services has plummeted due to the impulse of low-cost operators and closed 2022 with a fall of 6.4%.

The president of Telefónica, José María Álvarez-Palletelamented this week that telecommunications were the only European sector that had been deflationary in the last 25 years and called for a comprehensive reform at EU level to boost innovation.

IMPACT ON ACCOUNTS

Traders are beginning to notice in their accounts the impact of its new rates and cut promotions. The first of the large companies to present results was Orangewhich posted a revenue increase of 2.8%.

The company chains a second consecutive quarter of ARPU increases (the indicator that reflects how much customers pay on average monthly) among its convergent customers.

The company applied to end of march a price rise of 3.42% that is expected to push up both ARPU and revenues for the rest of the year.

For his part, telephone too increased its turnover in Spain until March (0.3%), while its ARPU has increased by 1.7% to 92.6 euros, influenced by the increase applied in mid-January. The company also expects billing to continue to rise over the next few quarters, by accounting for the new prices during the entire quarter.

At the same time, customers have naturally accepted the increase in the bill, which has resulted in a commercial performance which has even exceeded that of recent quarters in the case of Telefónica, which has registered the best performance in this section since the third quarter of 2020.

Tuesday will be the turn of vodafone to show the impact of its new prices, since it will present the financial results of its fiscal year, ending in March.

A MARKET AT TWO SPEEDS

Despite the photograph transmitted by the INE, the reality of the market is far from homogeneoussince the ‘low-cost’ operators, led by Digi, continue to be the great dominators of the high-cost market.

Last Thursday, during the presentation of results, the CEO of Telefónica, vile angel, assured that, in the Spanish market, it was consolidating this double reality: a more “rational” medium and upper segment with little promotional intensity, as opposed to a “low cost” where I expected there would continue to be tension.

“We see a lot of promotional effort right now (…) in addition to some initiatives to reduce prices by our competitors,” the company had previously pointed out. CEO of MsMvil, Meinrad Spengerin the operator results presentation.

Spenger also stressed that the company had not made significant price increases, beyond a few additional services. “Customers have accepted these moves well and we do not see a significant impact,” added the manager.

The CEO of MsMvil he also cut the company off from future promotional efforts, citing the need to be “responsible” in the long run and resigning himself to losing money to cheaper competitors.