Orange announced plans to increase the cost of its mobile and fixed line services in Spain, meaning the market will be the latest to see consumer price increases following consolidation in the number of operators.
The France-headquartered operator will add €2 ($2.19) per month to its Kangaroo Savings and Kangaroo No Limits services at the end of September, Reuters reported. A company spokesman told the news agency that the operator is responding to growing consumer demand for data, in particular mobile services on smartphones.
Orange will match the price rises with an increase in users' data allowances. The operator will offer an additional 500 MB per month of data, as demand for LTE (4G) services grows, Reuters explained.
The price rise matches a similar increase by Telefonica in May, Reuters reported, and mean Spain is the latest market to see consumer costs rise as a result of a reduction in the number of full network operators.
Orange's acquisition of Jazztel, which was completed in June, reduced the number of operators in Spain from four to three, and the price rise is a sign that the market is returning to growth after several years where the level of competition took its toll on prices.
Reuctions in the number of operators in Germany and Austria have had a similar effect on operators' revenues by enabling the remaining competitors to end crippling price wars by increasing the cost of their tariffs.
Italy now looks set to become the latest market where consolidation will occur, after Hutchison Whampoa and VimpelCom agreed to merge their respective operations (Three Italy and Wind).
Marco Patuano, CEO of rival Telecom Italia, said that merger was likely to improve margins for the country's remaining operators, Reuters reported in a separate article.
However, the effect of the merger could take at least a year to be felt by Italy's operators, with Hutchison and VimpelCom noting that it could take up to 12 months for their proposed merger to be completed, including the time taken for the deal to clear competition regulators.
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