Spain mobile operators cut prices as all lose business

MADRID, June 18 Tue Jun 18, 2013 7:30am EDT

MADRID, June 18 (Reuters) - Mobile telecoms companies Vodafone and Orange have cut mobile tariffs in Spain as data revealed all four of the country's operators lost thousands of clients in April in an increasingly cut-throat environment.

Orange said it had overhauled its mobile, home and business tariffs and would offer clients superfast mobile internet 4G services for one euro more than a current 22 euro ($29.36)tariff, also throwing in additional minutes and web browsing.

Orange's announcement followed Vodafone's decision on Monday to eliminate permanent contracts for clients not requiring a handset and cut prices for customers on its "Base" tariffs.

In Spain, where over a quarter of the workforce is unemployed, cash-strapped consumers are shopping around for the cheapest deals and some are ditching their mobiles altogether, with the market continuing to shrink.

More than half a million people switched operator in April and almost 3 million clients have changed provider since December, telecoms watchdog the CMT said on Tuesday.

In April, only "virtual" mobile operators, which rent capacity from traditional players, attracted new business, managing to sign up 219,297 customers.

Vodafone shed 107,210 mobile lines and market leader Telefonica lost 214,059 connections, while Orange and no.4 player Yoigo recorded smaller client losses of 15,467 and 12,307 respectively.

"The crisis is affecting operator loyalty more and more each day - since December 2012 the number of people switching operator has not dropped below half a million every month," the CMT said in a statement.

For months Orange and Yoigo gained clients as the two biggest operators, Telefonica and Vodafone, lost out to their smaller rivals.

But while Orange and Yoigo shed lines overall, they each picked up clients from other players, with Orange attracting 3,555 net customers and Yoigo signing up 4,639.

Spain's main operators, with the exception of Telefonica, have either launched 4G services or will make them available shortly, though in the current climate they will not be able to charge a premium for the service, with Yoigo giving it to 3G subscribers for free.

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