Yoigo, Spain's No. 4 operator, will take the fight to its larger rivals by cutting mobile tariffs by more than 20 per cent.
"We're going to launch a new tariff in December that will put the price of calls at 1 cent a minute, the cheapest offer in Spain," Yoigo CEO Eduardo Taulet told Reuters.
The operator attracted 330,000 new customers between January and September according to Spain's telecoms regulator, while Telefónica and Vodafone lost customers at record levels as Spanish residents looked to reduce expenditure amid a deep economic recession.
Of note, Yoigo has reintroduced handset subsidies with Taulet claiming that 70 per cent of new customers now opt for tariffs that include subsidies. The company said it would also look after its existing customer base by reducing those paying a monthly fee of €39 down to €30, according to Reuters.
Telefónica and Vodafone said in March and April, respectively, they would stop subsidising smartphones, resulting in sharp customer losses as customers fled looking for better deals elsewhere. Yoigo also cut down on subsidies, and Vodafone has now reinstated the subsidy.
Yoigo currently offers Android-based smartphones retailing at €500 for €360, with a 12-month contract.
Yoigo's owner, TeliaSonera, has offered it up for sale, with Vodafone and Orange both thought to be keenly interested. However, TeliaSonera CEO Lars Nyberg told Bloomberg that he is in no hurry to dispose of the business.
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