Is a mobile phone subscription too expensive? The telecom expert makes this classification: “This is the customers’ own fault.”

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Its British parent company, Liberty Global, lists Sunrise on the Swiss stock exchange. As Liberty Global explains, nothing will change for customers.

Sunrise only increased prices by four percent in summer 2023. Ralf Beyeler (45), a telecom expert at comparison portal Moneyland, therefore does not expect further regulation. Especially not downwards. There is almost no reason for companies to lower prices across the board. “Major telcos in Switzerland are taking advantage of the fact that customers in this country are extremely slow,” he says.

For most people, switching providers is out of the question. “Many customers therefore blame themselves for paying too much for their mobile phone subscription. Often this means 100 francs a month for a subscription that you can get for 20 francs from cheaper providers,” explains Beyeler. This will especially benefit top companies such as Swisscom, Salt or Sunrise. “Swisscom has many elderly customers who cannot even imagine switching,” the expert said. It will be useful to compare offers. Beyeler estimates that in many cases the savings potential will be between 50 and 80 percent.

The biggest growth in cheap offers

Conversely, this also makes it difficult for providers to steal market share from their competitors. Sunrise currently relies on subscription campaigns. The price of a package that includes a mobile phone subscription, internet and landline is now 85.85 francs per month instead of 151.80 francs. Minimum term: two years. The original price will then be paid again. If a customer with a high willingness to pay is encouraged to change, it is hoped that he will remain silent for a long time. Even the special offer isn’t particularly cheap, the telecom expert says. A similar package is available at the cheapest providers, starting from around 70 francs per month.

The telecom giant achieved the biggest growth last year with its secondary brands, such as low-cost provider Yallo. Providers use such cheap brands to compete for price-sensitive customers. It is unknown how often customers actually change. “It is assumed to be between 7 and 20 percent, depending on the provider,” says Beyeler.

Price increases increase profits

Instead of subscription campaigns, companies in the low-price segment are increasingly focusing on permanently low-priced offers, says Beyeler. For example, this is how Galaxus did it.

The fact that the majority of customers are not willing to change even if prices increase benefits companies: Sunrise was able to significantly increase its sales and profit margins following price increases in the second half of the year. The telecom company had sales of just over 3 billion francs in 2023 and an EBITDA (earnings before taxes, interest and depreciation) of around 1 billion. This results in an EBITDA margin of approximately 33 percent, which is expected to continue to increase, according to Sunrise’s forecast. Shareholders will be happy.

Source :Blick