Telefonica, Vodafone hit by defections in tight Spanish market

MADRID Tue May 21, 2013 5:22am EDT

MADRID May 21 (Reuters) - More than half a million Spaniards switched mobile phone operator in March to take advantage of the cheap deals on offer from competitors, with the market's main players Telefonica and Vodafone the biggest losers.

In the first three months of the year more than 1.8 million consumers moved to another mobile company, data from telecoms regulator CMT showed on Tuesday.

Orange, Yoigo and virtual networks, which rent capacity from established players, have stolen a march on the market leaders by appealing to consumers in search of savings as recession in Spain drags on and unemployment reaches 27 percent. The data showed 581,860 customers switched provider in March, the second-highest number of record.

Incumbent Telefonica's market share fell to 35.6 percent in March from 38.6 percent a year before, while Vodafone's shrank to 25.7 percent from 28.6 percent. Virtual operators now account for over 10 percent of the market, compared to 7 percent a year ago.

Vodafone, the world's second biggest operator, has taken total writedowns for Spain and Italy of 7.7 billion pounds ($11.7 billion) this year owing to tough conditions in the recession-hit markets.

Fixed line specialists like Jazztel have also won market share with conversion offers that include virtual mobile services.

CMT said the total net number of mobile lines in the country fell by 312,674 in March, with Vodafone shedding 297,870 connections and Telefonica dropping 247,570 connections.

There was better news for Telefonica in broadband, where it attracted 11,490 new clients. Cable operators lost just over 2,000 customers and other providers gained 33,890 new clients.

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