(Bloomberg) — Telefonica SA has announced widespread price increases in Spain in an effort to boost revenue after years of stagnant sales.
(Bloomberg) — Telefonica SA has announced widespread price increases in Spain in an effort to boost revenue after years of stagnant sales.
The Madrid-based carrier plans to notify clients “immediately” about “price updates across all products,” Chief Operating Officer Ángel Vilá said Thursday at the Morgan Stanley TMT conference in Barcelona. “I can confirm that we are moving to tariff upgrades.”
The company will raise prices by an average 6.8% for all clients of its Movistar brand, it said in a subsequent statement. Clients will be notified by letters in the next days and increases will start in January. The company is making use of a contractual clauses that allows price increases due to higher costs affecting “coverage, quality of the network or characteristics of service provided.”
Bloomberg News reported last week that Telefonica was preparing to increase prices.
Telefonica wants to charge more for its services to counter a surge in Spanish inflation, which reached a four-decade high this summer. The carrier had previously eschewed raising prices without offering added services, such as bigger data allowances.
Telecom operators in Spain, one of Europe’s most competitive markets, don’t automatically index contracts to inflation as is done in many other European nations. However, soaring prices are pushing some companies to reconsider, with Vodafone Group Plc announcing a plan in September to link local tariffs to inflation.
Telefonica’s revenues have stagnated in Spain since 2015.
–With assistance from Rodrigo Orihuela.
(Updates with amount of increase in headline, third and fourth paragraphs)
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