Vodafone Spain Launches DSL/3G Bundle

Cinco Días writes that Vodafone Spain has introduced a service bundle which combines the operator's DSL and 3G offerings. The price range, excluding value-added tax (VAT) is from 49 to 59 euro per month, depending on the choice of DSL access and the flat rate for calls to fixed-line numbers. Isaac Hernandez, Vodafone's director of broadband services, said that by using the combined tariff the clients can save 20 euro, if compared to what they would pay if subscribing to the fixed and wireless broadband products separately.

The customers can also add a flat rate comprising calls to mobile numbers for a monthly total of 68.9 euro, which according to Hernandez, allows them to have their all telecommunication services under a single invoice.

Outlook and Implications

• Tele2 Spain, Italy Acquired in 2007: In October 2007, Vodafone strengthened its position as an integrated operator in Spain and Italy by acquiring Tele2's local fixed-line assets for 775 million euro in total, which in Spain added some 550,000 fixed-line subscribers, including 24,000 DSL subscribers, to its clientele. As of end-2008, the operator's customer base had 373,200 broadband accesses, all served over DSL. This made it the country's fifth-largest service provider with a market share of 4.1% and below incumbent Telefónica, cable operator Ono, as well as DSL alternates Orange/Ya.Com and Jazztel. Vodafone Spain launched broadband services under its own brand in last October (see Spain: 25 September 2008: Other Spanish Alternatives Join Orange's NGN Case in Court; Vodafone to Launch Its Own DSL Offering).

• Integrating: Vodafone's mobile operations, as of end-March this year, had 16.039 Spanish clients and 5.264 of them had taken a 3G device as part of their subscriptions—nearly one-third, which is the highest uptake among the operator's European units, against the average of 22%. Like the DSL business, the mobile one has increased market share during the recession by benefiting from its price advantage against Telefónica, taking home 65% of all net additions in January-March (see Spain: 18 May 2009: Ported Mobile Numbers Up 26.9% Y/Y in March—Spanish Regulator). The new service launch is thus one of Vodafone's most significant moves onto the domain of fixed mobile convergence (FMC), and we expect that—like in Germany, where the carrier has fully consolidated its former fixed-line brand, Arcor (see Germany: 12 May 2009: Vodafone to Stop Marketing Arcor from 1 August)—in Spain the firm's strategy for propping service revenues will also have an increasing emphasis on bundles such as this.