Masorange lost 328,000 customers to competitors after merger | Companies
On April 1, 2024, Masorange began operating as an independent company following the completion of the merger between MásMóvil and Orange. A day later, the new company’s CEO, Meinrad Spenger, noted at a convention held at the Wizink Center in Madrid, in the presence of 5,000 employees (both in person and online), that it was not a merger of anyone. because the goal was not only to save costs, but also to grow revenues, customers and even employment. For now, these expansion plans aren’t drawing as much praise, at least not initially. Masorange’s revenue remained flat in September, up just 0.5% (+1.1% in the third quarter). On the employment front, the company is immersed in the application of an employment regulation (ERE) file, which involves the dismissal of 650 workers.
On the customer side, the growth target seems to have not yet been achieved, quite the contrary. In Masorange’s seven-month existence, the company has lost 328,000 broadband and mobile phone lines to competitors due to a portability process that allows anyone to change companies for free while keeping their number.
Specifically, from April 1 to October 28, Masorange transferred 287,419 mobile lines and 39,265 fixed and broadband lines, according to preliminary net mobility data provided by the sector, pending final data verified by the National Markets and Competition Commission (CNMC) ). Several conclusions can be drawn from analyzing these figures. First, customer flight was moderate at the beginning of integration last spring, accelerated in the summer months and increased sharply at the end of the summer period. From September to October alone, Masorange abandoned 126,000 mobile lines and 23,300 internet and landline lines.
This circumstance is connected precisely with the commercial war waged by operators and which is aggravated every year by strong promotions and discounts on two important dates: coinciding with the return to work after the summer holidays and Christmas. The so-called operators budget Companies such as Digi, Avatel or Finetwork have once again reduced the prices of mobile lines and especially fiber and mobile packages, benefiting greatly from this portability process. The champion was once again the Romanian company Digi, which since April 1 has taken almost half a million customers away from its competitors (390,000 mobile and 100,000 broadband).
And while the commercial battle in the telecoms sector is already fierce, changes have been added to Vodafone Spain’s strategy this year following its acquisition of Zegona. New CEO José Miguel García did not hesitate to apply aggressive prescriptions to the new Vodafone, which led him to revive Jazztel by simplifying the tariff catalog, simplifying promotions and promoting the low-cost Lowi brand. It has thus significantly slowed the loss of customers, although it has nonetheless dropped nearly 200,000 mobile phone lines and 59,000 broadband lines over the past seven months.
However, Vodafone’s negative October portability figures were skewed upward by the transfer of lines to Finetwork, which became independent as a full virtual mobile operator, although it continues to use Vodafone’s network following the renewal of a wholesale agreement between both companies. in May last year. In fact, Finetwork first appeared in October as a portability recipient in official statistics with a net balance of almost 30,000 mobile lines in its favor.
Movistar, the first major operator by revenue, although displaced by Masorange in terms of customer numbers after the merger, achieved a positive mobile portability balance of 48,720 lines (primarily thanks to summer campaigns) and abandoned 50,876 Internet connections.
Losses in three divisions
Another important thing that can be deduced from the portability figures is that Masorange is losing customers in its three main divisions: MásMóvil (Yoigo, Pepephone, Lyca, Llamaya, Lebara and MásMóvil itself), Euskaltel (Euskaltel, R, Virgin and Telecable ) and Orange (Orange, Jazztel and Simyo). And before the merger happened, the MásMóvil group offered positive net portability balances (customers acquired from other companies minus lost customers) almost every month, while Orange suffered from negative portability. Now they are all losers: brands covered by the old MásMóvil program have canceled 107,019 mobile lines and 7,660 landline lines in the last seven months; Orange loses 153,570 and 27,772 respectively, while the northern cable group loses 26,830 mobile and 4,489 fixed. This does not mean that some individual brands, such as Pepephone, have a positive balance sheet.
The merger also had positive consequences. To Masorange’s credit since it began its journey as an independent company, in addition to the customers it is turning away due to portability, it has also gained new sign-ups, which partially offsets this flight of lines. Thus, from January to the end of September, the group added 350,000 customers between fiber optic lines (142,000) and postpaid mobile lines (208,000), for a total number of lines of 33 million, of which 25.8 million are mobile and about 7.1 million are fixed broadband. The company has not detailed these numbers since April 1, so registration data under the Masorange name is unknown.
Additionally, regarding expected synergies from the merger, the company said it is on track to achieve expected savings of approximately US$500 million, of which US$85 million has already been achieved in the first nine months of the year against a target of US$100 million. million for the whole of 2024, the report says. Finally, although revenue stagnated, profitability (as measured by EBITDA) increased by 7%.