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Telefónica tempts customers with top-of-the-line secondhand phones

Movistar to begin new initiative this week in bid to hang on to clients

As competition hots up between Spain's cellphone operators, the mobile arm of Telefónica, Movistar, is to begin selling secondhand cellphones this week. The initiative means customers will have the chance to purchase smartphones handed in by Telefónica customers upgrading to newer models at discounts of up to 40 percent.

The company says the phones come with a full guarantee, and will have been checked for any faults or damage. The idea is to extend the offer to a range of smartphones, but will initially only apply to the Samsung Galaxy SIII, which will be on sale at 319 euros, 40 percent cheaper than its retail price new.

The Galaxy SIII is the Korean company's top-of-the-range phone, and the main rival to Apple's iPhone. Telefónica says the phones will initially come from subscribers abroad, but that it will later use material from its Spanish customer base.

Movistar hopes to begin acquiring secondhand cellphones by offering customers up to 245 euros in exchange for a deal to purchase a new phone. Phones will then be sent away for a full overhaul. They will be cleaned externally and internally, with all software and data from the previous user removed. The batteries will be checked and replaced if defective, and the latest version of the phone's software will be installed.

The phones will then be repackaged with its battery and charger in a specially designed box that will make clear that while as good as new, it is in fact secondhand. The phones will be sold through Telefónica's network of shops. The guarantee will cover parts and a replacement phone in case of breakdown.

Some 29 shops throughout Spain will initially be involved, and customers will be able to pay in interest-free installments of around 20 euros a month. Telefónica has reached an agreement with the consumer financing arm of leading savings bank La Caixa to facilitate paying by installments.

Luis Miguel Gilpérez, the president of Telefónica, recently announced a new strategy for the company, saying it would be introducing a sales model aimed at looking after its current customer base, rather than focusing on attracting new clients.

Among the measures is an end to its policy of deals that give customers from other companies new phones up front, along with other offers. Telefónica says it is looking at introducing an interim program to reward customers with loyalty points for maintaining their fixed line, broadband, or television service, or for contracting a cellphone service, that can then be exchanged for a cellphone.