Telcel and AT&T lose thousands of recharge users due to the advance of MVNOs

The story is very different among MVNOs. Bait, Walmart’s carrier and the main player, added 7.1 million customers in the first few months of this year to total 13.3 million subscribers. The company’s main customers are prepaid service providers.

Although prepaid does not represent large revenue margins for telecommunications companies, it is a relevant service for their operations. This type of customer is a promise for companies, since at a certain point they can migrate to the postpaid world and this allows them to increase their spending on connectivity services, which translates into higher sales for operators.

But in the last two years, the three main telecom operators have seen their prepaid operations challenged by the launch of aggressive rates by MVNOs that offer large amounts of megabytes for a lower price. The connectivity services offered by MVNOs are up to 30% cheaper compared to those offered by traditional operators such as Telcel, according to data from Selectra.

Daniel Hajj, CEO of América Móvil, has acknowledged the battle that Bait and MVNOs represent with the launch of aggressive offers that have allowed them to reach users that even Telcel had not ‘awakened’, however, the executive has questioned the viability of this type of rates.

“Their promotions [de Bait] “They are very aggressive. I don’t know how profitable their rates will be, but we certainly see a very competitive market,” said the executive in a conference call with analysts on the occasion of his financial results for the first quarter of 2024.

Analysts consulted previously explained to this media that the loss of users registered with AT&T and Telcel is due, in part, to the launch of mobile recharge plans with unlimited data at a very affordable cost by the MVNOs, and whose offers are difficult to replicate for a traditional operator.

But the decline in prepaid lines from Telcel and AT&T could also be explained by a strategy to purify their user base. The companies are betting on customers with greater purchasing power, who are in the postpaid market.

However, it is a fact that both operators have begun to worry about the rapid growth of MVNOs such as Bait and the risk it represents for their mobile business, especially the recharge business.