Yoigo sets 3G cost benchmark
Telia Sonera was able to build its 3G network in Spain, which was commercially launched on 1 December, for a benchmark low cost, according to Eva Lindqvist, svp corporate marketing for TeliaSonera’s mobile business.
TeliaSonera, using Yoigo as its brand name, is the fourth player in a Spanish market dominated by Telefonica and Vodafone, but also recently boosted by the takeover of Amena by Orange.
Its game plan for Yoigo, the brand name for licence holder Xfera, is to have a very low cost base, enabling it to offer low cost services. To do this it has worked with principal supplier Ericsson to roll out at low costs. Its total financing need, including investments in network, IP service platforms, start-up costs and spectrum fees (including accrued spectrum fees from 2002), is estimated to be less than SEK 9 billion (EUR 1 billion) for the first five years. TeliaSonera said that the operation is expected to be cash flow positive and earnings accretive within the same time frame.
The operator has done a deal with Vodafone to provide 2G coverage outside its 3G footprint, and has a distribution agreement with The Phone House as well as with Dextra moviles for logistics.
The aim is to have a 10% market share by 2015.
Lindqvist said that across the TeliaSonera group, data revenues were still very low. The operator has introduced flat rate tariffs to try and encourage usage, as well as free access to services through its SurfPort data portal. That decision led to a 400% increase in data usage – albeit from that “very low” base.
Although a data card with single sign-on access for WLAN, cellular and fixed access had increased enteprise use, mass consumer use of 3G services was still some way off.
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