Telefónica and CaixaBank set up a new company to strengthen their mobile device financing agreement

The company will be called Telefónica Consumer Finance

• The growing popularity of instalment payments for mobile devices, particularly since the launch of Movistar Fusión a year ago, has encouraged the two companies to develop their agreement into a joint finance company.
• The new firm will be 50% owned by each of the partners, with Telefónica acting as the sales partner and CaixaBank, via its FinConsum subsidiary, providing financing and overseeing operating procedures.

Telefónica and CaixaBank have agreed to set up a joint consumer finance company, which will help customers in Spain to acquire mobile handsets and devices. The new firm, which will be called Telefónica Consumer Finance, is the natural successor of a 2012 agreement between the two companies, under which CaixaBank, via its FinConsum subsidiary, helps Movistar customers to pay for their mobile devices in affordable instalments over 24 months. 

The deal was signed by the Chairman of Telefónica Spain, Luis Miguel Gilpérez, and the Vice-Chairman and CEO of CaixaBank, Juan María Nin. The new company will be held 50% each by Telefónica and FinConsum. Telefónica brings to the new company its long experience in mobile device sales, as well as its extensive network of mobile phone stores, while FinConsum, with its proven track record and specialisation in consumer financing, will run the key operating procedures.

The Vice-Chairman and CEO of CaixaBank, Juan María Nin, said "with more than a million contracts expected annually, this finance company will be the second largest in Spain in terms of transaction numbers, which underscores just how important this agreement is".

Meanwhile, the Chairman of Telefónica Spain, Luis Miguel Gilpérez, pointed out that "Movistar's extensive network of stores, the largest in Spain, means that the new finance provider's services will be offered at more than 2,000 points of sale". He added that, "the deal reaffirms Movistar's commitment to offer its customers the finest quality services and to help them to buy or update their smartphones, thus ensuring that they benefit fully from all the products and services that we offer".

More than 700,000 mobile phones financed in 12 months

In 2012 Telefónica revolutionized mobile device sales in Spain, moving away from a model based on financial support and towards new formats, such as buying used handsets, refurbishing phones and allowing customers to pay interest-free instalments via their mobile phone bills, thanks to its deal with FinConsum.

The growing popularity of this financing model, especially after the launch of Movistar Fusión in October 2012 (with more than 700,000 instalment sales so far), has encouraged the two partners to advance their agreement and set up a new company. This will provide a stronger foundation for partnership between the two groups and ensure that financial solutions can be customised to Movistar users.

One benefit for customers will be a single and rapid procedure for all operations, meaning they will be able take home their new mobile devices without delay. A highly innovative paperless contractual procedure, using digital signature technology, is currently being rolled out at Movistar stores and should be ready by the end of this year.

Furthermore, the procedure will be even simpler for "la Caixa"'s 13.8 million customers in Spain, who will simply be able to show their "la Caixa" card and provide their personal information in order to secure financing.

Telefónica Consumer Finance is expected to take full control of the mobile device financing business as of the first quarter 2014.

About FinConsum

FinConsum is a credit provider that specialises in consumer finance. It is part of the CaixaBank group. FinConsum is a financial partner to more than 10,000 shops and dealers. More than 3,000,000 people have already trusted FinConsum to finance their purchases and projects.

According to ASNEF data, as per June 2013, FinConsum is the fastest growing consumer finance company in Spain, with a 44% increase in new business and processing 330% more operations than the previous year.