Spanish Yoigo - from catastrophe to success
In the year 2000, three mobile operators monopolized Spanish mobile telecommunications. Their rates were high and the subscribers didn't understand what they were paying for. A fourth operator, Xfera, entered the arena when several companies joined together and purchased an expensive license to compete in the 3G market.
But 3G technology was not yet ready for commercial use and Xfera's plans were put on hold for six years. During this time, the IT bubble burst and telecom companies were hard hit by serious financial problems due to the expensive 3G licenses. The odds for Xfera were not good.
In Sweden, Telia and Sonera had merged in 2002. Sonera already owned 17 percent of Xfera at the time. TeliaSonera believed in Xfera's business concept and bought all of 76 percent of the shares from other shareholders, thus becoming the majority owner of Xfera.
The investment was criticized in Sweden. The Swedish industrial daily Dagens Industri called it "The Spanish Catastrophe" and analysts proclaimed that there was not a chance of the investments in the company ever paying off. Xfera's investors continued to believe in the company.
On December 1, 2006 it was finally time for Xfera to enter the 3G market. A young Swede – Johan Andsjö, age 33 – was appointed to lead the company. A business model was built up with the focus on outsourcing so as to achieve maximum flexibility through access to the expertise of the company's suppliers. The strategy was to become the first low-price operator in Spain.
Not many believed in the new mobile operator other than the enthusiastic Xfera team and a number of Spaniards who longed to participate in the mobile community at a reasonable price.
A new revolutionary company brand was created. A new image, a new name and a new logotype in four clear colors: YOIGO! The focus was on simplicity – people should be able to understand what they were paying for.
A lot had to be done in a short time, not the least the preparation of a new sales strategy in collaboration with direct sales channels and the Phone House chain. The goal was to attain the country's best coverage.
A huge advertising campaign was launched with the creative message "Spain's first operator!" Media coverage was intense. Dolls and nursery rhymes were used in the advertising to emphasize simplicity and availability. Words such as transparency, honesty and integrity were commonly used in the media.
But adversity was encountered from the start. There were delivery problems due to the substantial demand, problems with implementing zero-rates. And the sales channels were insufficiently mature for selling mobile phones.
TeliaSonera now wanted to sell Yoigo, but Yoigo had come to stay.
Adversity was turned to prosperity. Team Yoigo's relations with its customers were characterized by simple and open communications at increasing numbers of sales locations − there are now 1000 − and at a newly opened call center. The Spaniards had been longing for this and they loved it. Beginning in 2010, Yoigo could offer mobile Internet services. Popular poolside press conferences were held and Yoigo was the first in Spain to show the way to social media, such as Twitter and Facebook. The number of customers has passed the 2-million mark, the rates were low, the goals achieved.
"Today everyone in Spain knows what Yoigo stands for," says Yoigo's communications director Masha Lloyd.