Telefónica’s cellular operator will remove entry barriers to attract new customers, mainly of the low income segments, to whom it will offer minimum consumption plans. Roberto Casado, Marketing VP of Movistar’s companies, assured that “Movistar has a caldron with an amount of controls (prices, product, promotion and advertising) that adjusts pursuant to the market’s behaviour”. For Casado, “the difference with the other operators lies in that Telefónica has much more gas to heat the caldron”. Currently, Movistar has 8 million customers and a market share of 44.7%. Its competitors, Movilnet (CANTV) and Digitel (Oswaldo Cisneros) have a share of 41.6% and of 13.6% respectively.
Convergencialatina (CL): Pursuant to the recent changes in the local scenario, how will Movistar's growth be?
Roberto Casado (RC): I believe that the real big change took place three years ago, when Telefónica arrived to Venezuela. In that period, we went from 4 million customers to more than 8 million. Namely, the penetration was triggered by Telefónica’s arrival. But there are other features that foster this market. On the one hand, Telefónica’s purchase power that is translated into the deployment of a greater prices offer is not exercised by any other operator here. On the other hand, we change that strategy of the Venezuelan market that was handled by entry barriers; namely, the lowest price is the one that rules. And now, although we are still growing at competitive prices in the low range we have also spread a lot in the medium range. But our strategy and the market’s, in general, will always be aimed at having the customers talking. What we do is to offer some gift service plan or pack so that the customer first talks and then, he naturally acquires the consumption level expected from him.
CL: Which relationship is there between SMS growth and voice?
RC: The SMS growth slope is higher, or more inclined, in percentages, than voice. The voice spreads together with the subscribers’ base, or a bit more than it; but data grows much quicker, mainly SMS. When we trade packs, we offer one with voice and data, or only voice, according to our current interests. The Venezuelan market, in comparison with the rest of the region, has a prepaid base with subscription. In the world, prepaid concept includes the fact that it is paid before consuming but only what is consumed. If I speak one minute, I pay a minute. Our prepaid concept, on the contrary, includes a charge in the card that is money in it, but if the customer signs in a services pack and pays that pack, he does not have money but services available to be consumed.
CL: How will you get to low income sectors?
RC: On the one hand, reducing the entry barriers with the handset costs. In the last two years, handsets prices evolved, in local currency; disregarding inflation and devaluation, handset prices went from US$ 215.5 to US$ 62.5. But the challenge is also to offer the customer an attractive plan so that he is maintained. So, it is a two-leg strategy: we offer them something to encourage them to jump and purchase a telephone, and once inside, we make sure that the customer consumes, at least, all the months and that he does not leave.
CL: Does Digitel's arrival with GSM represent some change for Movistar?
RC: The arrival of new competitors move the market and that is good. The fact that Digitel operates with GSM technology will affect roaming and the handset cost, that are cheaper than CDMAs in low range. But saying that we are going to offer more expensive or cheaper handsets is not a strategy. Therefore, we will try to convince our customers with the features of our network, independently of the technologies. For us, the fact of having a greater community of customers with packs on net is an important distinguisher. I do not see that the technology is a factor that makes the competition different. The end user needs good prices, good services and good packs. Thus, a new competitor is welcome.
CL: When would GSM launch be announced in Venezuela?
RC: I cannot talk about that (giggles). There is no a public and official position yet, about GSM (In July, Convergencialatina said thatMovistar would have decided to deploy networks under the European standard. The company would make the plan official next month) .
CL: Which is the situation of EVDO market?
RC: The hardest of EVDO is that the devices are still expensive. The cheaper are around US$ 200 or US$ 300 and a service with handsets of that cost cannot be overspread. Then, we may offer a series of services with EVDO, fixed broadband or residential over EVDO campaigns to compete with other broadband services, but to widespread EVDO as content download or as real mass applications in the telephone, until there are not devices with lower costs, is hard. Our broadband strategy lies on EVDO. We have very good coverage nationwide, we are a wireless company and the solutions we offer lie mostly on wireless solutions. EVDO is very well placed because it is a mobile data and fixed broadband tool.
CL: How is competition for corporate market?
RC: In the corporate market, there are huge opportunities. Although the market grows a digit every year, the corporate are is not a high growth segment, therefore sharing the market with our competitors means removing customers. It is a tougher and more rational struggle in which we have to deal with issues of the product, customer assistance and support. The key issue lies in the way to have a mass company, like us, considered by the business customer as someone that could really provide the service individually. Segmentation is simple, each customer is a segment.