Alejandro Rivas-Micoud

Spanish telecommunications company Alo continues to push forward into Spain’s crowded telecommunications market, still dominated by former monopoly Telefonica.  The company which employs “USA Solutions” as its tagline is pursuing a bigger market share this time by offering what Americans have taken for granted for a long time: free local phone calls.

It’s the most direct way to speak to consumers in a language they understand, says Alo CEOAlejandro Rivas-Micoud.  “You tell people in the street you can offer them three megs of broadband, and they look at you funny, but everybody knows what free phone calls are,” stated Rivas-Micoud.  While chief competitor and market dominator Telefonica has been slow in rolling out broadband internet service, Alo is concentrating on improving its market share with a more recognizable feature.

The plan is to offer the free local phone calls in a package including broadband internet via wireless local loop at a reasonable price.  Alo’s hope is that this will bring more people in to use Alo’s services and also jump start their internet sales through the connection.  The ad campaign is already running well ahead of the broadband’s implementation with the hope that customers will have an appreciation for the benefits of broadband once it rolls out.

This is quite an attractive approach for the residential market, but it has yet to be determined whether this strategy will win them enough market share to make up for the smaller penetration of the business market.  Business customers generally spend considerably more on telecommunications products and services than residential customers, especially internet services.  By targeting the residential customers with free local calling, Alo is prioritizing itself in a market that is less appreciated in the telecommunications industry of Spain.  The question is whether they’re missing the most important target in doing so.  That is a question only time can answer.

Tags: Alejandro Rivas Micoud, Alo Ceo, Telefonica