Price war breaks out among Finnish mobile operators
TeliaSonera and Elisa respond to DNA challenge
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The mobile telephone operator DNA has slashed its prices in an effort to lure back customers it has lost this year. The company reports losing 70,000 customers in the past six months.
In response, DNA has brought new subscriptions onto the market in which monthly fees and call prices have been significantly reduced. DNA’s competitors see the move as quite aggressive.
"It looks like the panic button has been pushed to the bottom", observes Janne Vainio of TeliaSonera.
The new Onni subscription introduced by DNA allows subscribers to make calls costing 6.9 cents a minute at any time of day, regardless of the service used by the recipient of the call. The price is one cent less than that of most other service providers.
The cheapest corresponding prices for Saunalahti, Tele Finland, and Kolumbus are 7.9 cents a minute.
The cut-rate prices come in response to the popularity of the cheap subscriptions offered by competitors. In the summer TeliaSonera stopped the trend of customer desertions with its new subscriptions under the name Tele Finland.
In April-June TeliaSonera lost 55,000 mobile phone subscribers. In the third quarter of the year the decline was just 2,000.
Vainio notes that the Tele Finland marketing organisation got into full gear in the third quarter.
TeliaSonera refuses to disclose how many subscribers Tele Finland has. However, estimates are that the number runs in the tens of thousands.
Elisa began to market its own Kolumbus discount subscription in the spring. The company will not reveal how many subscribers it has, but in April to September the number of subscribers using Elisa’s network grew by 50,000.
This reverses the trend of the first quarter, when Elisa lost 55,000 customers in three months.
In spite of the popularity of the cheap brands of its competitors, DNA does not plan to set up a separate discount subscription of its own, says Pekka Väisänen, director of sales and marketing at Finnet, the owner of DNA.
Another loser in the mobile subscription war is the American newcomer ACN.
Although the company does not disclose how many subscribers it has, figures from other companies suggest that it lost tens of thousands of customers in the second quarter. The trend is partly attributed to increasing mistrust of the company.
ACN’s sales practices have sparked criticism in Finland, and problems linked with billing and cancelling subscriptions led the Finnish Communications Regulatory Authority to impose a fine earlier this year.
Many of ACN’s disgruntled customers have reportedly switched over to Saunalahti, which has seen its subscriptions skyrocket throughout the year. At the end of September the company had 372,000 subscribers, which is 70% more than it had a year ago.
Cheap prices attract customers, but they also eat into profits. Saunalahti gets an average EUR 30 of turnover a month for each mobile subscription. The equivalent figure for TeliaSonera is EUR 38.
Saunalahti’s success also benefits TeliaSonera, whose network Saunalahti uses. Meanwhile, the setbacks experienced by ACN have a negative impact on TeliaSonera, if its customers switch over to Elisa, for instance.
Helsingin Sanomat
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| 11.11.2004 - TODAY |
 Price war breaks out among Finnish mobile operators |
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