If you don’t know me by now

Posted on Thursday, September 13, 2018

Telecom Argentina and Vodafone have announced a new partnership agreement and, of course, the pundits are trumpeting that the world’s number four operator (by subscribers) has finally come to the region. Not sure that is exactly what is happening.

I saw this brief note in the GSMA’s Mobile World Live email and it certainly caught my attention. The article made it clear that this was a marketing arrangement but still anything that puts Vodafone and Latin America in the same sentence is big news.

The Americas are without a Vodafone-branded operation and so whenever something is for sale, whenever a government talks wistfully about attracting new operators to their market, whenever there is a spectrum auction, out comes the ‘Simply Red’ speculation.

This map shows why speculation is always rampant about Vodafone and the Americas.

The red countries have branded-operations. The ‘burgundy’ countries have operators with ‘Partner Market’ arrangements like this one with Telecom Argentina. The page has not yet been updated for this alliance; the newest ‘member of the family’ is said to be Tunisia.

Firstly, let’s go to the Vodafone press release and see what exactly has been proposed. Here is the full text (which is too short to bother summarizing).

Vodafone and Telecom Argentina today jointly announced a new Partner Market agreement for Argentina.

Under the non-equity agreement Vodafone provides strategic advice to Telecom Argentina and shares global best practice in a range of areas including customer service and retail, technology, IT and procurement.

Vodafone Partner Markets Chief Executive Diego Massidda said: “This partnership allows Telecom Argentina to benefit from Vodafone’s international experience and expertise, and access our company’s global products and services.  I am delighted that Telecom is joining us as one of our Partner Markets and I am looking forward to our relationship growing in the coming years.”

Carlos Moltini, CEO of Telecom Argentina, said: “At Telecom Argentina, the customer is the centre of all our decisions.  That’s why we have decided to work with Vodafone to strengthen our business strategies, drawing on Vodafone’s experience to offer our customers a wide range of services to a high international standard.  Vodafone’s expertise also adds value to the proposals we are planning to deploy in the future.”

It does not talk about branding, and, speculation about Vodafone sweeping in and buying out the Argentine shareholders has been squelched (“non-equity agreement”).

Secondly, let’s look at things from Vodafone’s perspective.

The Vodafone Partner Markets webpage says

Vodafone’s Partner Markets team works to form strategic alliances with local operators all over the world to market a range of global products and services that extend our reach into local markets.

Our agreements vary from Vodafone branding to product branding, roaming and service re-sale.

So the combination of a broad corporate mandate for Partner Markets and a brief, vague, press release means that this could represent anything. At the very least it is a mandate to explore what might be done together.

The Partner Markets page says the program extends from “Chile to Russia”. Entel has (or at least is said to have) such an arrangement for Chile and Peru but it is very much ‘behind the scenes’. (The map reinforces the Entel idea since it is the only Latin American operator that only works in Peru and Chile.) The ‘red brand’ in Latin America is Claro and if Vodafone has impacted Entel’s product set it would take more research than I was prepared to do for this blog. This timeline for Entel mentions a recent ‘alliance’ with Ericsson but nothing about Vodafone.

As I frequently tell reporters, I doubt if Latin America takes up much time in Vodafone’s annual strategic planning exercises. The only reason it might absolutely HAVE to have a presence in the region is if it had a significant multinational enterprise business which it does not. The company’s M&A activity has mostly been swapping consumer-oriented properties like cable TV companies in Europe.

And it no doubt has far better things to do with its money than trying to get into the consumer telecom business in Latin America. Get in between America Móvil and Telefonica swinging hammer blows at each other? There have to be easier ways to make a buck, or a few quid or a peso.

Finally, for those with the name of an American carrier on the tip of their tongue, Vodafone in Argentina is not the same as AT&T in Mexico. Mexico is an adjacent country to AT&T’s stronghold, a significant trading partner (President Trump not withstanding) and there are tens of millions of Americans of Mexican descent with relatives ‘back home’ (again, President Trump not withstanding).

So, in Mexico, AT&T has a strong enterprise and consumer community-of-interest.

In the rest of Latin America, well, why do you think DirectTV Latin America is for sale?

Maybe Vodafone would buy it!

Unlikely.

If you don’t know me by now / You will never never never know me.

(Title reference: I originally called this ‘Simply Red’ after the protagonist’s principal brand color. But that got me thinking about Simply Red hits and this title seemed to work better.)

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