Tuenti has definitively said goodbye as a telephone operator. It is a movement that has been felt since the arrival of O2, which has taken almost all the limelight in terms of news and rates, but in recent months, its final disappearance seemed more imminent, especially since Telefónica began to change O2’s strategyand even Movistar itself.
Telefónica had Tuenti as a low cost brand, and Movistar as a premium brand, so the birth of O2 was classified by the Group itself in 2018 as a medium cost operator: an MVNO with closed prices and quite generous rates that help the user not to worry of everything. And that was its essence until last fall, but let’s go by parts.
The medium cost moved to Movistar in 2020
After two years with a base offer of around 45-50 euros, in the spring of 2020, O2 lowered the price of fiber and mobile combos to 38 euros for the first time, which facilitated the elimination of fiber offers on Tuenti two months later.
At the same time, the new family of Conecta rates arrived at Movistar, with an essence very similar to that of O2, offering a simple rate, with the basics, without additives and with enough megabytes and gigabytes for most users. It was somewhat more expensive than what O2 itself offered, but in practice it has been the way of associate the medium cost with the main brandjust as its rival with Vodafone yu had been doing.
Since then, the new developments in Tuenti mobile rates were paralyzed, to the point that two years later, the same contract rates were still in force, so Tuenti was encouraged to switch to O2 to improve them. An eternity compared to most rivals, who improve their rates several times a year. In prepaid there have been no notable developments either, since most of them were linked to specific promotions.
With the market increasingly opting for low cost, the multi-brand strategy seemed to lose its appeal for the main operators. Orange made Amena and República Móvil disappear, to keep three main brands. Vodafone made yuser rates less relevant while strengthening Lowi, and now Telefónica has killed Tuenti, but not before preparing the ground for a new low cost.
This is the new low cost of Telefónica
Since last fall, O2 has undergone a major shift in its strategy, from being so focused on capturing users with a higher average income, to trying to stop the loss of lines in exchange for entering a price war which Telefónica has traditionally resisted. From then on, the minimum to be paid for Telefónica’s combinations went from 38 to 30 euros.
The same 30 euros minimum that only a few daring like Digi, Lowi or Simyo had deigned to offer. It was something unheard of. The low cost brands of Movistar, Vodafone and Orange had responded for the first time to Digi’s attack, and Telefónica had put the icing on the cake with O2.
To top it off, last week O2 also improved its mobile lines, with which it also responded to Digi with very similar offers for the cheapest contract line and for family packages with several mobile lines. The result is that in a few months, O2 looks much more like Digi than Tuenti ever was.
In four years of agony, Telefónica strengthened O2 a little more every time it stripped Tuenti of some advantage, until it cornered it and finally closed it.
On the other hand, the prepaid of traditional brands is being in charge of facing the low cost offensive from Digi, with a first response from Vodafone, followed by Orange, and although Movistar has not reacted definitively, it has been chaining free gigabyte increases for two months capable of dealing with the competition’s 100 GB. It is only necessary for Movistar to make these types of improvements definitive, as has already happened in the most recent past, to confirm that the prepaid Movistar has definitely gone to low cost.
Another symptom of Movistar prepaid getting closer to low cost in that it has been chosen as a destination for Tuenti prepaid customers, so on April 5, Movistar created an exclusive rate for them with unlimited calls and 5 GB for 5.95 euros. A card rate without competition today.
Movistar will also continue to be premium
The fact that Movistar’s prepayment has more and more similarities with the low cost of its competitors is not incompatible with having left room for the medium cost of the Conecta rates, nor with its intention to relaunch the commitment to the most premium services (and expensive), such as pay television, but also other services that it plans to integrate into its future post-merger rates, such as gaming services, alarms, health, or insurance, among others.
After ten years of a premium strategy focused mainly on Fusion rates, Telefónica has confirmed that in the coming weeks will announce the details of the new offer that Movistar is preparing to replace Fusión.
