Pedro Serrahima, Director of Multi-Brand strategy for Telefónica Spain

  • The O2 brand is to be used in Spain to offer simple, yet well-supported, mobile and fibre bundles in the Spanish market.
  • Consumer trust put at the centre of the new offering, which resulted in O2 edging out Vivo as brand of choice.
  • Telefónica using the launch to put pressure on regulator to accelerate the process of declaring regional markets for fibre as competitive.

Telefónica Espana launched the O2 brand in the Spanish market in June 2018, promising a premium communications-focused service for customers. The offering is in beta from late-June 2018, with a nationwide launch anticipated in September 2018.

There had been speculation that the arrival of an O2 operation in Spain would be another attempt to target the country’s low-cost market, principally to counter the ongoing success of MásMóvil’s mobile brands Pepephone and Yoigo. However, the offerings linked to the new brand are aiming to focus on simplicity, without cut-price tariffs.

O2 in Spain will offer two core products:

  • A mobile-only service, featuring unlimited national calls and texts, and 20GB monthly data, for EUR20 per-month.
  • A fixed-mobile offer featuring 100Mbps symmetric fibre broadband connectivity and the same mobile deal. This product will cost EUR45 per-month in markets where Telefónica is deemed to face effective competition (see below), and EUR58 per month elsewhere.

For both products, up to three additional mobile accesses can be added to a principal O2 account, offering unlimited calls and 10GB data for an additional EUR15 per-month each.

The O2 services in Spain will be offered on short-term contracts, with Telefónica stressing that cancellation will be simple and instant, with no winback measures in place. It appears that, at launch at least, the mobile element of the O2 service will be SIM-only with no handsets available for sale.

Personalised service – at a respectful distance

As well as the simplicity of the product, O2 in Spain is positioning itself as a hands-off partner for consumers, with commitments to not engage in sales or intrusive promotional activity. In launching its service, it even noted that GDPR consent will not be required from customers because it does not intend to use customer data for any marketing purposes.

To provide the premium sheen, O2 is also focusing on its local Spanish contact centres, where it intends to enable contact centre workers to take ownership of customer queries, with authority to resolve most issues without referring the matter to a superior.

O2 customer service staff in the country are not on commission for additional sales, and Telefónica has insisted that fast call resolution will not be a significant metric for staff. Where possible, customers will be able to deal with the same contact centre employee when they call the company regarding any issue.

The operations is also taking a ‘refund first, question later’ approach to complaints. Should a user contact O2 with a queried charge, the disputed amount is to be refunded before the perceived problem is investigated. If it subsequently transpires that the charge was not made in error, the operator will reclaim the initial sum.

Telefónica upfront on regulatory disparity

The disparity between the prices of the fibre product in different areas is a result of regulatory determinations on competition in the Spanish fibre sector. There are 66 markets that have been identified as effectively competitive in the country by regulator La Comisión Nacional de los Mercados y la Competencia (CNMC), which enables Telefónica to price services more aggressively.

The incumbent considers that many more parts of Spain are subject to effective competition, but claims the CNMC has not updated the list of competitive markets for two years. Telefónica/O2 has committed to reduce the price of fibre to EUR45 per-month in any area as soon as it has been cleared as competitive.

It also indicated that it will implement a form of compensation for customers required to pay the higher rate, although the details of how this will work are not currently clear.

Serrahima makes a splash with O2 pick

Pedro Serrahima, the former Managing Director of Pepephone who was recently appointed Director of Multibrand Development at Telefónica España, is in charge of the new unit, alongside the Tuenti brand (Telefónicawatch, #126).

Serrahima is understood to have been behind the decision to use the O2 brand for the new offering, having also considered two other options. The creation of an entirely new brand was deemed too costly an exercise, while the use of the Vivo brand from Brazil was not considered the best choice for a European market. There were said to be concerns about the reputation of the Brazilian marque in Spain, which was described as “contaminated” following recent investigations relating to the business practices of Telefónica|Vivo, according to El Confidencial.

In April 2018, the Brazilian public prosecutor launched a public civil inquiry into Telefónica|Vivo’s use of the personal data of 73 million users for advertising via Vivo Ads, the operator’s mobile marketing platform (Telefónicawatch, #126) – a state of affairs that could have undermined the key message of the new service on respect for customer data and the avoidance of the hard sell.

  • While it appears that O2 will not be a direct, like-for-like competitor to MásMóvil, the latter is proving a threat in the Spanish market. According to the CNMC, the number of mobile subscribers that switched operators in 2017 reached a record level of 687,974: MásMóvil gained almost 107,000, compared with only 35,000 for Telefónica.

British and German feathers ruffled?

  • Ahead of the Spanish O2 launch, El Confidencial reported there had been opposition from O2 Germany and O2 UK to the brand expansion, based on concerns that using O2 for an offering in a very different mobile market such as Spain could be detrimental to the overall image of the brand.
  • The risk of brand confusion was said to be of particular concern for O2 UK, which is still considering an initial public offering (Telefónicawatch, #126 and passim).

Image: Telefónica

If you enjoyed this article, sign up to receive more directly in your email inbox.

Contents

EXECUTIVE BRIEF

GROUP

Management up-date

Álvarez-Pallete hails his technology company [p.6]

  • Designing the future

People

GLOBAL RESOURCES

Partners

Suppliers

Interview: CCS’s Greaves on working with Telefónica [p.11]

  • Building a Telefónica relationship
  • Today Madrid, tomorrow the world?
  • Hardware making things possible for small vendors and big operators

CCS interview [p.11]

  • Trials of TIP for small vendors
  • CCS on the O2/CTIL London wireless network [p.15]
  • CCS background

Telefónica Business Solutions

Telefónica trumpets strategic alliance with AWS [p.16]

  • AWS takes its place beside Azure

Telxius teams with Equinix [p.17]

TIWS reaches another level of automation [p.18]

  • Automation of operations complete
  • Next step: all-IP voice

Virtualisation 

Telefónica builds on SD-WAN ambitions with Nokia and Nuage [p.20]

UNICA Lab waves in NETSCOUT, RADCOM VNFs [p.22]

  • NETSCOUT gets in early with virtualisation visibility
  • OSM key to Telefónica collaboration
  • Rival RADCOM also in on the act

More potential assurance partners circling [p.23]

Digital services

Blockchain

  • Telefónica and Rivetz re-up relationship  [p.25]
  • Telefónica joins up for inter-carrier blockchain testing

Open Future

Content

Telefónica adds Netflix to content offer

  • Spirit of co-opetition lives on
  • Part of a wider content strategy
  • Álvarez-Pallete and Hastings get pally on Twitter

Netflix already big in Spain [p.28]

Security

Telefónica claims quantum leap in encryption technology

Valencia named as cybersecurity HQ [p.30]

LATIN AMERICA

Argentina

Ericsson to upgrade Movistar RAN network in Argentina [p.33]

  • Ericsson progress presented as a win against Huawei

Brazil

  • Ericsson and Telefónica team on farm 4G IoT [p.35 ]
  • Netcracker maintains its hold within Vivo [p.36]

Colombia

Ecuador

Mexico

EUROPE

Germany

Álvarez-Pallete underlines commitment to Germany [38]

  • E-Plus integration taking longer than anticipated
  • Group offers muscle, but won’t influence decisions

Telefónica wary of Vodafone acquisition plans [p.39]

Spain

Ola, O2 [p.41]

  • Personalised service – at a respectful distance
  • Telefónica upfront on regulatory disparity
  • Serrahima makes a splash with O2 pick
  • British and German feathers ruffled?

Telefónica accelerates copper closures [p.43]

Telefónica brings Google into Living Cloud [p.44]

Movistar VeriSure Hogar closes down [p.45]

UK

Arqiva backs O2 small-cell rollout [p.46]

Beacon light begins to fade

O2 gets Netflix [p.47]

Further reading

INDEX

Index

Symbols

21st Century Fox

Sky plc 7, 28

A

Acision 8

ADVA Optical Networking 29

AI 33

Alcatel-Lucent 15

Alphabet

  — Google 33, 44

  — G Suite 44

Altran 23

Amazon 16, 22, 28, 44

  — Amazon Web Services 16, 22, 44

Arqiva 46

B

BT Group 14, 21, 25, 29

C

Cambridge Broadband 15

CCS 11, 12, 13, 14, 15, 46

Cisco Systems, Inc 21

CNMC 28, 42

Cobham Wireless 23

Colt Group 25

Conectel 36

ContentWise 27

D

Dell Technologies

  — VMware 17, 21, 22

Deloitte 7, 8

Deutsche Telekom 7, 15, 38

E

Equinix 17

Ericsson 8, 12, 13, 23, 27, 33, 34, 35, 43

European Telecommunications Standards Institute (ETSI) 18, 22

F

Facebook 15, 17, 33

  — Telecom Infra Project 15

  — WhatsApp 35

G

Gartner Group 20

General Electric 7

Groupon 7

GSM Association (GSMA)

Mobile World Congress 23, 33

H

HBO 28

Huawei 8, 23, 29, 34, 45

I

Ingram Micro 11

J

Juniper Networks 21

L

Luxoft Holding 23

M

MásMóvil 41, 42

  — Yoigo (Xfera) 41

Microsoft 11, 16, 17, 21, 22, 33, 44

Azure 11, 16, 22, 44

N

NEC 21, 36

  — Netcracker 36

NET 22, 23

Netflix 26, 27, 28, 47

NETSCOUT 22, 23

Nokia 12, 20, 21, 43

Nuage Networks 20, 21

O

Orange 28, 43

Spain 28, 43

P

PCCW 25

R

RADCOM 22, 23

Raízen 35

Red Hat 21, 23

Regions

  — EMEA

    — Belgium 44

    — Europe 7, 21, 22, 26, 37, 42, 43, 44, 47

     — Finland 44

     — Germany 7, 38, 39, 42, 45

     — Israel 23

     — Netherlands 22, 44

    — Spain 7, 16, 17, 20, 26, 27, 28, 30, 33, 38, 41, 42, 43, 44, 45, 47

     — UK 7, 8, 11, 12, 14, 29, 33, 45, 46

  — Latin America 15, 23, 26, 27, 32, 34, 35, 38, 45, 47

     — Argentina 33, 34, 38

     — Brazil 7, 8, 17, 33, 35, 36, 38, 42

     — Chile 26, 35

     — Colombia 34

    — Ecuador 35, 36

    — Mexico 7, 36

    — Peru 36

  — North America

    — USA 17

Rivetz 25

Royal KPN 38

RTVE 27

S

Samsung 13

Securitas Direct 45

Siemens 7

Sigfox 45

Symantec 11

T

Technologies

  — 3G 13

  — 3.5G 43

  — 4G

  — LTE 12, 13, 35, 45, 46

  — 5G 11, 13, 14, 33, 38, 43, 46

  — ADSL 43

  — Blockchain 25

  — Broadband 15, 28, 33, 41, 45

  — Business/Operations Support Systems (BSS/OSS) 33, 36

  — Cloud computing 44

  — Ethernet 13, 18, 21

  — GSM 13

  — ICT 8

  — Internet of Things 16, 26, 30, 33

  — IP 13, 15, 18, 21

  — IPTV 27

  — Linux 21

  — LPWA 45

  — MIMO 14

  — MPLS 21

  — NB-IoT 45

  — Network functions virtualisation (NFV) 17, 22, 23, 29

  — NGN 13, 38

  — OpenStack 17, 21, 22

  — PaaS (Platform as a Service) 16

  — SIM 16, 25, 41, 47

  — SMS 35

  — Software defined networking (SDN) 18, 21, 29

  — TV 26, 27, 28

  — VDSL 13

  — WLAN

  — Wi-Fi 11, 12

Telefónica Group 6, 7, 8, 11, 17, 25, 26, 27, 38, 39, 45, 47

  — Associates and investments

    — Sigfox 45

    — Digital services

     — AURA 33, 45

    — ElevenPaths 8, 16, 25, 30

    — Open Future 7, 26, 35

    — OTT 26, 27

    — Tuenti 42

    — Wayra 7, 26, 35

  — Directors

    — Cirac, Ignacio 29

    — Löscher, Peter 7

  — Europe

    — E-Plus 38

    — Germany 7, 38, 39, 42

    — giffgaff 8

    — O2 7, 8, 11, 12, 13, 14, 33, 38, 39, 41, 42, 45, 46, 47

    — Spain 7, 20, 21, 42, 43, 44, 45

    — Telefónica Deutschland 7, 36, 39

    — UK 7, 8, 11, 12, 13, 14, 26, 42, 46, 47

  — Executives

    — Álvarez-Pallete Lopez, José María 6, 27, 28, 38, 39

    — Barahona, Claudio 26

    — Cantarelli, Stefano 8

    — Castillo Sanz, Eva 7

    — Devine, Amanda 7

    — Díaz Hernández, María 8

    — Dominguez, Jose Luis 8

    — Elizondo, Antonio 22

    — Franks, Robert 7

    — Garcia, Maria Luisa 7

    — Gomez, Santiago 7

    — Haas, Markus 39

    — Mata, Joaquin 21

    — Moratilla, Daniel 8

    — Naiksatam, Ashwin 8

    — Navarro, Eduardo 8, 35

    — Pavlovic, Natascha 7

    — Phillips, Tristan 7

    — Ponce de Leon, Marcela 7

    — Prado, Elisa 8

    — Rava, Federico 33

    — Rodríguez-Ramos, Jaime 7

    — Saadi, Miloud 7

    — Seitz, Alexander 7

    — Serrahima, Pedro 42

    — Wood, Alison 8

    — Zunzunegui, Adrian 7

  — Global Resources

    — BRUSA 17

      — Cornerstone Telecommunications Infrastructure 11, 46

      — MAREA 17

    — Telefónica Business Solutions 8, 16, 36

    — Telefónica Global Services 7

    — Telefónica International Wholesale Services 18

    — Telxius 8, 17, 45

    — UNICA 21, 22, 23

  — Latin America

    — Brazil 8, 33, 35, 36, 42

    — Colombia 34

    — Mexico 7, 36

    — Vivo 8, 33, 36, 41, 42

  – Movistar+ 26, 28, 33

  – Products and services

    — Fusión 45

    — Living Cloud 21, 44

    — Movistar+ 26, 28, 33

    — Movistar Play 26

    — Movistar Series 27

    — Movistar VeriSure Hogar 45

    — O2 Refresh 47

    — pay-TV 26, 27, 28, 33, 39, 47

    — Simplicity 41

Telstra 25

Tesco 8

Tuenti 42

Twitter 27, 28

U

United Nations 35

V

Verizon Communications 12, 22

  — Verizon Wireless 12

Viacom 27

Viavi 23

VMware 17, 21, 22

Vodafone Group 28, 39, 46

  — Germany 39

UK 46

W

We-Technologies 26

World Bank 34

X

Xura 8

Z

ZTE 12

About

About Telefónicawatch

Report: #127
Published: June 2018
Next report: July 2018
For more information visit: Telefónicawatch