What goes up sometimes comes down

ONE basic service in crisis-weary Spain now costs less.

Mobile telephone bills fell by 22 per cent in the period between the third quarter of 2012 and the third quarter of 2013. 

This was the steepest year-on-year reduction in recent years, overtaking 2012’s 18 per cent reduction and the 9.6 per cent fall recorded in 2011, said Spain’s National Markets and Competition Commission (CNMC).

Mobile companies’ tariffs based on average earnings per minute have fallen by half since 2005.  In contrast Iberdrola, Endesa and Gas Natural Fenosa, which account for 90 per cent of the domestic power market, have increased their bills by 70 per cent since then.

Competition amongst telecommunications companies and their pitched battles in the war to poach each others’ business have benefitted clients.

This has improved Spain’s EU rankings, as only two years ago the country’s mobile-to-mobile calls were amongst the most expensive in Europe.

The three companies that originally dominated the mobile market – Telefonica, Vodafone and Orange – no longer have it in their clutches following the ascent of Yoigo as the country’s fourth-largest operator. 

Yoigo changed the mobile landscape and so did the Mobile Virtual Network Operators (MVNO in English and OMV in Spanish).  These do not own networks but instead buy bulk access at wholesale rates which they then resell.

Movistar, which once had 46.6 per cent of the market, now has 33.6 per cent; Vodafone has lost 6 percentage points of its share while Yoigo and the MVNOs have 18.6 per cent more.

But, as has been pointed out, although their turnover fell in 2013 for the fifth year running, mobile companies are not passing on that loss – unlike Iberdrola, Endesa and Gas Natural Fenosa.