Phone company profits are at all-time lows and subscriber numbers are plummeting by the day across Spain, as the recession continues to inflict its punishment on the consumer. However, this has only spurred on one Mr. Jaime Bustillo to launch his own cell-phone company despite the fact that the nation’s economic turmoil so far has cost at least 27% of Spain’s workforce their jobs.
So, what’s the deal? Madness or Genius?
Well, Bustillo is no stranger to the industry as he was once employed by Vodafone – the second largest carrier in Spain. As of now though, he’s going his own way with Airis Mobile which according to him should be able to chalk up a lofty 50,000 subscribers in its first year.
What makes Airis Mobile different is the way in which Bustillo has set it up specifically with the economic downturn in mind. He’s more than aware of the troubles being faced by the consumer public and the needs that must be filled, therefore he’s offering them cheap Smartphones and tailor-made packages for calling neighboring countries around Spain. Every day, thousands of Spaniards are contacting the far-reaches of Europe to look for work – Bustillo wants to be the man to provide them with the tools they need to find employment.
However, he doesn’t see himself and his brand as one of the next big names in global mobile sales and service, but rather as an alternative to popular web-based communication services.
“Really we are competing with Skype,” he recently said while talking on his new venture.
Airis Mobile is a mobile virtual network operators – or MVNO for short – which involves the rental of the necessary capacity from an established carrier as opposed to actually building the network exclusively for the business. The bonus of the MVNO is that there are practically no overheads and fractional setup costs compared to the establishment of a full-scale network.
In addition, the phones themselves can be distributed with ease via any selected High Street stores or online – both excluding the need for physical premises.
MVNOs accounted for approximately 7% of the Spanish Smartphone market at this time last year – this has now increased to over 10% as the nation looks for any and every means to make is money go further.
“Virtual operators can certainly take a bit more market share. We aren’t going to be as big as Telefonica or Orange, what we’re looking for is something specialized,” added Bustillo.
The success of the MVNO model is relatively unpredictable as the idea has been met with varying levels of success across Europe. In Germany for example MVNOs account for a hefty 24% of the market, though in Italy this falls below the 5% mark.
And regardless of whether Bustillo’s Airis Mobile hits the big time or not, it’s one of the only carriers in Spain today that’s showing any signs of growth. By contrast, Telefonica is down from a 38.6% share of the market last year to 35.6% today, while Vodafone has also seen a year on year decline from 28.6% to 25.7%.