It wasn’t easy. First, he had to convince a company outside of telecommunications to offer connectivity services in a highly competitive and concentrated market. Among the motivations of Cejudo, who in 2020 was the Chief Communications Officer (CCO) of Altán, to knock on the doors of retailers were the red numbers of the Red Compartida company.
“To be honest, Walmart wasn’t the first retail door I knocked on. But I spoke with Guilherme Loureiro (then CEO of Walmart Mexico and Central America) and Beatriz Núñez (head of the growth office for Walmart Mexico and Central America); The project was something that seemed complex in itself, but Walmart decided to invest in the Altán network and focus on the business,” said Cejudo, now director of Bait, in an interview with Expansión.
Four years after that meeting that gave birth to Bait, the OMV has become one of the most important in the segment and has even positioned itself as the fourth most important telecommunications operator in the country, behind Telcel, AT&T and Telefónica.
The company has 15.1 million customers, an unusual number in a concentrated market, as well as an ecosystem that encompasses 15 Experience Centers where users can purchase smartphones, computers and mobile recharges, as well as Walmart’s more than 3,000 stores.
But Bait’s advance has made the industry uncomfortable. AT&T, for example, questions the accelerated growth of Walmart’s telephone company, arguing that the company has subsidized rates from Altán that it cannot match. Telcel filed a complaint against Altán for the same matter.
However, the Bait manager refutes the competitors’ accusations by pointing out that the complaints from AT&T and Telcel are a reflection of the competition that has developed in the mobile market. “The offer is exactly the same as that of other MVNOs, the difference is in how it is marketed and the tools you have and the distribution channels that are super important,” he said.
The integration of Bait with the physical stores of Walmart and Bodega Aurrera, as well as the offer of exclusive promotions at events such as the “Irresistible Fin”, has contributed to generating loyalty among users and attracting new customers. Bait users not only enjoy competitive rates on telecom services, but also receive additional benefits such as free megabytes and the option to access unlimited data packages at discounted prices.
Bait bets on the postpaid segment
Cejudo took over the reins of Bait seven months ago, after a brief stint in the management of Virgin Mobile, to give “continuity to a dream that he saw from afar.”
For the manager, Bait consolidated the first phase of the project: having a robust base of recharge subscribers, together with its Experience Centers, similar to the Service Centers of companies such as AT&T and Telcel. Now, it wants to go to the next level: enter the telephone plans segment towards the first half of 2025, one of the most important verticals, in terms of income, for traditional telephone operators.
Despite being the telephone company with the largest new customers, it is still one of the companies with a low Average Revenue Per User (ARPU). In telecommunications, the number of customer additions is not enough to have stable margins for an operation; however, the ARPU is the most important metric to determine the performance of a telephone company.
For example, Bait’s ARPU is 72 pesos, according to information from the consulting firm The CIU, while Telcel’s is 177 pesos, more than double. This situation causes the América Móvil company to register better economic levels in its operation.
In the third quarter of 2024 alone, Telcel invoiced 85,315 million pesos from sales of mobile services, while Bait obtained income of 14,913 million, according to data from the Federal Telecommunications Institute (IFT).
Bait is aware of the income asymmetries that exist between giants like Telcel, which is why it has changed its strategy to better capitalize on its user rate. Raúl Quintana, director of operations for Walmart’s omnichannel vertical, explained in a conference with analysts that the OMV recently launched new recharge rates of 60, 120 and up to 230 pesos in order to improve its income. But the plan has not been enough.
“There are undoubtedly challenges even though Bait has consolidated itself in prepaid, and it is not because the company wanted to be in a single target, but we clearly know that today we are not in a market that we want to have. That is why we are going to launch a postpaid offer to consolidate ourselves in those sectors that like this type of service more,” commented Cejudo.
The postpaid segment is the vertical on which Telcel and AT&T have focused in the last three years to monetize the deployment of 5G, whose network involves large capital injections by requiring up to 10 times more of the infrastructure that the companies currently have. This approach has allowed Telcel to increase its ARPU by 8.5%, while AT&T’s has stabilized at 141 pesos.
Another plan that Cejudo will promote during his administration is to improve Bait’s service. The manager is aware that more users have greater needs for coverage and technology such as 5G, which is why he has assured that they will look for options to expand their service portfolio. This will involve knocking on the door with all operators such as Telcel and AT&T, despite having a solid relationship with Altán.
“I am in front of a company that makes me happy, but especially in front of an opportunity to consolidate a job that I started from a different side without the slightest hope that it would be consolidated in the short term. If this situation were a soccer analogy it would be having centered, finished and scored a goal,” he said.
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