Telefónica adjusts Spanish convergence strategy

About ten years ago, Telefónica España provoked consternation on the Spanish market and elsewhere with the launch of new service bundles under the Movistar Fusion brand that allowed customers to subscribe to packages of mobile voice and data, home broadband, and TV services in return for discounts, special offers and more.

Fast forward to today, and fixed-mobile convergence plays are de rigueur in the telecoms market.

Operators in a number of countries are offering triple-play, quad-play and even quintuple-play bundles as they seek to reel in and keep subscribers – from Orange Open in France through to Vodafone One, Deutsche Telekom's MagentaEINS and more.

Figure 1: Telefónica is introducing a radical overhaul of its convergence offer by allowing customers to combine non-traditional services with mobile, home broadband and TV offerings.
(Source: Reuters/Alamy Stock Photo)

As telecoms markets have become more competitive, operators have also been branching out into new areas in order to create new revenue streams.

This strategy has been particularly evident in the highly competitive market of Spain. Telefónica España, for example, is now offering a burgeoning portfolio of adjacent services that it sells alongside its more traditional connectivity offerings.

For instance, the Spanish operator offers financial and insurance services, as well as telemedicine services under Movistar Salud, device insurance under Seguro Dispositivos and connected car services via Movistar Car.

Pick & mix

Telefónica is now introducing a radical overhaul of its convergence offer by allowing customers to combine these non-traditional services with mobile, home broadband and TV offerings.

As of tomorrow, the familiar Movistar Fusion brand is being replaced with the new miMovistar marque to reflect, as president of Telefónica Espana Emilio Gayo put it, the operator's "strategy of diversification."

The focus is now less on service bundling and more on service combinations. Telefónica described miMovistar as an "ecosystem" of services that will allow customers to pick and choose what they want with the help of an online configurator.

The different services will be grouped under headings such as miConectividad (connectivity); miEntretenimiento (entertainment); misFinanzas (finances); miHogar (home); and miBienestar (wellness).

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More services will be integrated in future, such as Movistar Car/Moto, Movistar Money, home insurance, energy and additional connectivity options.

Telefónica is of course far from alone in seeking alternative revenue streams. Vodafone Spain also sells alarm services in collaboration with Securitas, while Orange Spain has launched Orange Bank and also sells insurance services.

Másmovíl, which is set to merge with Orange Spain should regulatory approval be secured, sells energy services under several brands.

Sub-brand Yoigo offers a growing range of adjacent services, including EnergyGO green energy products, the DoctorGO app, HomeGO smart home alarm services, SafeGO digital security, MoneyGO payments and the Next Smart Car device for in-car connectivity.

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— Anne Morris, contributing editor, special to Light Reading