Telefónica will retire ‘Fusion’ to sell its multiservices with a new brand

Telefónica Spain is preparing a radical renewal of its Movistar Fusión offer, which will include a change in the brand and the launch of a new marketing model for its services and products. As elEconomista.es has learned from sources familiar with the situation, the teleco understands that the time has come to reconsider a proposal more in keeping with current times, almost ten years after the premiere of ‘Fusion’.

Specifically, the company is studying the incorporation into future packages of a series of vertical businesses unrelated to connectivity, whose projection is comparable to those of telephony and broadband. In addition, all these services will be open to all customers, whether they are from Movistar or not.

Launched in the fall of 2012, Fusión represented a farsighted contribution to the sector, since, for the first time, the model grouped under the same header and invoice the convergent services of fixed line telephony, mobile, mobile broadband, fixed Internet access and pay television. Its debut in the market generated a drag effect on the rest of the sector, which led to the arrival of comparable convergent offers from other operators, where the profits from certain activities offset the losses of others.

For a long period of reflection, the strategists of Telefónica Spain are now committed to revitalizing that revolution with the incorporation of the multitude of vertical offers far from strict connectivity: alarms, health, energy, connected car and finance will share the showcase of the heir brand de Fusión, along with the traditional telephony and Internet access, both fixed and mobile. Pay TV will also be part of the renewal, although it is likely to be more flexible and open than the current approach.

With the prior approval of the competition authorities, including the replicability test of telecommunications services, Telefónica Spain will study the possible commercialization of individualized television events, excluded from the current bundling of cinema, series, sports, League, Champions, hunting, golf, adults and bulls, among others.

As this newspaper has been able to find out, Telefónica Spain is in the analysis phase of the different options, including a new corporate identity for the future ‘marketplace’ heir to ‘Fusion’.

“The company already exceeds 100,000 alarm customer households, in alliance with Prosegur”

The packaged offer of home connectivity and other types of services will allow Telefónica to increase its average revenue per user (arpu) of Fusión, which at the end of last September stood at 89.60 euros. This amount increased by 2.5% from one quarter to the next, thanks to the commercial pull of football, and it increases the distance not only with the rest of the Spanish operators but also with that of their European peers. The commercial strategy will also allow the churn rate to be reduced, currently just 1.4%, which entails reinforcing user loyalty.

Fixed and mobile telephony customers will always be able to change their operator whenever they want, but the decision will be more difficult to make when several vertical services linked to Movistar coincide. In fact, the prices will be presumed to be advantageous for customers who contract several grouped packages compared to those who contract them individually.

differentiation strategy

According to data from Telefónica corresponding to the third quarter of the year (the next quarterly accounts will be published next Thursday), Movistar’s convergent clients decreased by 3% in year-on-year terms, with the loss of 43,000 subscribers in the third quarter of 2021. Due to its On the other hand, Fusión Empresas customers grew by 9% year-on-year until September 2021, the same as higher-speed fiber accesses.

So far, in the residential segment, “the differentiation strategy based on the development of digital services that add additional value to connectivity” has recorded positive results. Thus, Movistar Prosegur Alarmas has grown by more than 100,000 customers since its launch; Movistar Salud exceeds 50,000 customers, waiting to know the Movistar Seguros home insurance data, in collaboration with BBVA, Allianz and SantaLucía.

A long commercial journey is also expected for the Movistar Car proposal, which connects the car to make it safer and smarter, with a solution with 20 GB of data to promote 4G WiFi, an automatic assistance system with 112 in the event of an impact (if the vehicle is in motion), location and route information, maps with GPS locator, traffic and radar, and information on the state of the car.