Hard-pressed Spanish mobile operators will see the price war in the country intensify, according to the the CEO of Yoigo, who predicts tariffs will fall by another 30 per cent in the near future.
This dire forecast comes after the three main operators--Movistar, Vodafone and Orange--have completed the implementation of their latest low-cost tariffs of just over €0.06 per minute as an attempt to stop subscribers churning to Yoigo and MVNOs.
However, speaking to the Spanish daily Cinco Dias, Yoigo CEO Johan Andsjo said that these actions have not halted the flow of new customers being attracted to his company. "Our €0.06 tariff was launched more than a year and a half ago on the market and it is only now that the other operators react,"
"The price war has just begun for real this year and will continue," Andsjo said. "Mobile prices in Spain will drop by another 30 per cent. We have the advantage of knowing how the price war works because we've lived it with TeliaSonera [Yoigo's parent company] in Sweden."
However, Andsjo said that he does plan to introduce further price cuts, at least not immediately. "Since we entered the Spanish market we've never looked at our competitors to set our service prices,"he said. "We can further cut rates, but we believe it is not necessary yet."
Commenting on the company's plans for the future, Andsjo says he wants to continue with the price war, and strengthen Yoigo's mobile data and mobile Internet offerings, and implement VoIP for international calls. "The cost structure will be very clear--no small print, with the customer only paying for what they consume," he said.
The company has also decided not to involve itself in making further bids for LTE spectrum in the current auctions. Andsjo maintains that the return on an investment of this sort is poor, and "the payment has to be made now, while the frequencies cannot be used until 2015."
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