Operators break the 20 euro taboo and low-cost rates are becoming more widespread

In the past, the taboo faced by many operators was to lower prices to 30 euros. Of course, users always welcome price reductions and the appearance of cheap tariffs, but in some cases telecommunications companies are forced to juggle to reach these costs. However, that point is now behind us, since operators have already moved on to the next level: breaking down the 20 euro barrier. And this is how the market has entered an era of low-cost tariffs in which competition between operators is critical.

Digi opens the 20 euro ban

Operators are increasingly choosing to open up to the low-cost market and thus be able to continue fighting the aggressive prices that Digi boasts. This Romanian operator was the one that decided to go all out on the 20 euro barrier and thus make a very strong statement. Of course, this has led other operators to have to look for alternatives and ways to demonstrate to the market that they are not willing to remain in the background.

Meanwhile, the big operators, those that have customers looking for a product of a higher level, sometimes, see how a fierce battle is being fought in the low-cost segment. In this, after Digi, Finetwork also wanted to join in. And, to do so, it has taken good note of its rival, since it has wanted to break the 20 euro barrier. This cost, available at Digi, was already low, but Finetwork has adjusted it to be able to offer its customers a proposal for 18.90 euros. Thus, the operator market is a constant launch of punches and blows from side to side with which the telecommunications entities confirm their commitment to remain at the forefront.

The secret of low cost fares

In all cases, the operators that do not hold back and are going all out are approaching this reduction in profits in the same way. They know that, in most cases, they can make the most of it if they adjust prices as much as possible and if there are factors that give them the opportunity to do so. Digi, for example, has offered its best prices through the fibre and mobile service it provides outside the Telefónica network. By saving those costs, it has the opportunity to make an adjustment that, for the customer, is very good news.

Lowi has also followed this trend of reducing costs to the extreme and, like Digi, has done so by launching its best prices for those areas where it benefits from its own network. In this context, by matching low-cost costs and offering customers increasingly better prices, operators are resorting to other hooks to be able to stand out. For example, the permanence periods. Lowi, in its case, although it has caught up with its rivals, has a one-year permanence period, which is a higher figure than other operators.

Those who are still resisting reaching the level of the maximum low cost are brands such as O2, although Digi is knocking on the doors of all the names in the industry and threatens to continue growing. With the figures for the month of April on the table, we discover that Digi took 500,000 fixed and mobile portability. Of this amount, more than 400,000 correspond to mobile lines. These numbers not only confirm Digi’s enormous growth, but also imply that its rivals are losing many lines in the portability process.

It is therefore expected that operators will not abandon the low-cost sector that they are trying out and it is likely that more names will join this trend. There are quite a few operators that have recognised that they have to be competitive and have reduced prices to attract customers, something that is increasingly being seen in the market. The problem is that, in this way, margins are adjusted so much that the accounting figures in global terms do not come out well. The result of this is the corporate instability that is currently being experienced with layoffs and employee dismissals in a sector that is not going through its most favourable moment.