Masmovil puts its energy into electricity

Masmovil has taken things to the next level with the acquisition of an electricity and gas provider that significantly increases its presence in the energy space.

The telco announced the purchase of a controlling stake of an unspecified size in Energía Colectiva, which provides renewable electricity and gas under the Lucera brand. It also declined to disclose the price of the deal.

The move represents the company’s third foray into the energy sector. It already runs Pepeenergy, an energy retailer set up by Pepephone with a view providing low-cost electricity and gas to its mobile and broadband customers. Masmovil acquired Pepephone five years ago. Late last year Masmovil’s Yoigo brand launched EnergyGO via a deal with Energía Colectiva, pitching it as a wholly green energy product that would enable telecoms customers to make savings of around 20% compared with traditional energy providers.

This latest step sees it take control of Energía Colectiva, boosting its overall energy customer base to 100,000.

“With the acquisition of Lucera, we are taking a further step in our commitment to offer our customers energy services under the best conditions by promoting the use of renewable energy in Spain,” said Masmovil CEO Meinrad Spenger, in a Spanish language statement.

“We want to be a multi-service operator by adding new commercial proposals to our connectivity services that are useful to our customers and that bring them concrete benefits and savings,” Spenger said.

He did not say that adding additional services that are useful to consumers also helps create some stickiness, but he could have.

There are also cross-selling benefits. Masmovil did not say how many of its 100,000 energy customers are also phone and/or broadband customers, but it’s a safe bet that and that are not will receive some pretty compelling offers before too long.

Its energy rates appear to be pretty compelling for existing phone customers too. Masmovil has not shared details of the uptake of the EnergyGO offer it launched via Yoigo in mid-December, but describes it as a success that “has been well received by Yoigo’s customers and the market in general.”

Customers have three pricing plans to choose from, and these are available to both residential users and small businesses. “The pricing model…is designed so that an average Yoigo customer can save around 20% on their electricity bill (€120 per year on a typical bill),” Masmovil said.

The Masmovil group had 9.5 million mobile customers as of October last year, according to the latest figures from regulator the CNMC, giving it just over 17% of the market. It is starting to look like a serious competitor to the market’s second and third players Orange and Vodafone, which claimed 24% and 22% respectively at the same date; Telefonica’s Movistar remains out in front with a market share of close to 30%. Masmovil also has a growing presence in the fixed broadband market, accounting for close to 12% of connections.

The group is clearly hoping that this foray into energy will help it to attract new customers and retain the ones it already has, boosting its market position and its balance sheet.

“With the launch of EnergyGo, the Masmovil Group transformed the telecommunications sector, becoming the first of the four major telecommunications operators to offer its customers electricity,” it noted in the takeover announcement.

Doubtless the other three are taking notice.