Telefonica plans to offer Spanish customers superfast internet service for under US$39 a month. The offer will be available for one year. Already there is a fierce competition in the Spanish telecom market, which is good for the subscribers.
With the current offer, subscribers monthly bill will be reduced by twenty five percent lower than the usual price Telefonica charges for fiber optic internet connections. Telefonica currently offers broadband speeds up to 100 Mbps.
Ever since the gripping of worst economic recession has started showing up its ugly face customers in Europe in general have been looking for reducing their utility bills. Spanish telecom market has become more competitive in recent months as a considerable percentage of subscribers ditch their mobiles and move to cheaper providers to save money.
Current unemployment rate in Spain is 26 percent. Telecom service providers have responded positively to declining consumer confidence by announcing offers that under-cut competitors, which helps them to retain market share.
Telefonica is the largest service provider of telecom services in Spain. Telefonica's revenue dropped by thirteen percent, the reason mainly could be attributed to recession. The service provider loses hundreds of thousands of mobile subscribers every month but has managed to keep its broadband subscribers with a bundled "quadplay" package.
Telefonica's competitors in Spain are France Telecom and Vodafone. They have also plan to build a joint fiber optic cable network in Spain to provide high speed broadband to 6 million homes. Adding fuel to the competition, France Telecom's local unit Orange Spain had launched its own fiber optic services targeting to connect almost 100,000 homes before this summer. Orange Spain would offer an internet connection speeds of up to 100Mbps and phone services for 25.9 euros a month for the first year, This undercuts Telefonica's offer, but Orange Spain's network reach is limited to a small area. Telefonica has a wide reach in Spanish telecom market.
Another cable operator ONO offers a high speed internet connection and fixed telephone line package in Spain. ONO's broadband speeds are up to 100 Mbps, but the internet and fixed line package offered by ONS costs more than twice that of Telefonica's new offer.
In brief, subscribers in Spain can enjoy the price war and at the same time get more services from telecom service providers in the coming months.
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