The Spanish group Telefónica announced a major reorganization in its operations, ending the Telefónica Digital unit, created in 2011 with the objective of bolstering Telefónica’s place in the digital world and leveraging any growth opportunities arising in this environment. To replace its digital unit, Telefónica has created the role of the chief commercial digital officer, who will be responsible for fostering revenue growth.
Telefónica is also closing its Latin American and Telefónica Europa and Telefónica Digital headquarters offices, in São Paulo and London respectively. Last year, Telefónica moved its Latin American headquarter from Madrid (Spain) to Brazil.
On the cost side, the company has strengthened the role of the chief global resources officer in order to capture gross savings of up to 1.5 billion euros in the next years, including the synergies plan in Germany.
Both officers will report directly to the chief operating officer (COO), as will the local business CEOs for Spain, Brazil, Germany and the United Kingdom, in addition to the Latin American Unit, now without Brazil. The new model integrates the activities carried out to date by Telefónica Digital, Telefónica Europe and Telefónica Latam into the Global Corporate Centre, thus simplifying the organization.
In a press release, the company has justified the structure, saying it gives greater visibility to local operations, bringing them closer to the corporate decision-making center, simplifying the global structure and strengthening the transverse areas to improve flexibility and agility in decision making.
The president of Telefónica, César Alierta, said that Telefónica’s new strategy is supported by four pillars in the short term:
- Growing revenue, by extending the commercial offering to new services in the digital world.
- Modernizing networks and systems, through accelerating the deployment of the most modern technologies: fiber and LTE and the deep transformation of systems.
- Increasing efficiency through simplification and cost-cutting as well as ongoing financial discipline, prioritizing investment in growth projects that generate added value.
- Strengthening leadership in the digital ecosystem, by driving a new public positioning enabling the hyper sector to re-establish balance in the value chain.
Furthermore, Telefónica announced its financial results. Globally, the company ended the year of 2013 with an increase of 16.9% in its net profit to U.S. $6.3 billion (4,593 million euros), but a drop of -8.5% in its revenues to to U.S. $77.9 billion (57,061 million euros). The company also released its 2013 basis for 2014 targets, as the picture below shows.
Femtocells: TIM Brazil has moved forward its femtocell strategy as part of diversifying its network structure. The carrier announced it signed with Alcatel-Lucent to integrate femtocells into its 3G network, which encompasses its largest user base. Femtocells won’t replace the traditional RBSs (radio base stations) due to limited capacity and potency.
In a statement, Daniel Hermeto, director of supplies and supply chain at TIM Brazil, said that the carrier will make significant investments in femtocells until 2016. Starting now and over a three-year period, TIM will make use of Alcatel-Lucent’s Enterprise Cell 9362, Homecell 9361, and Metrocell Outdoor 9364 to help in the delivery of a cost effective solution to improve coverage and capacity for subscribers. The project will be expanded as part of the network’s overall infrastructure.
“An heterogeneous cellular network means adding a femtocell layer (indoor use) and small cell layer (micro- and pico-cells for outdoor or indoor use) to the traditional macro-cellular layer. This technology is already mature around the world,” said Marco Di Costanzo, mobile network director at TIM Brazil, in a statement. Di Costanzo said that there are currently 7 million micro-cells installed worldwide, 60% of which are in U.S., 30% in Asian-Pacific region, and 10% in Europe, with the main driver being to support data traffic growth.
Boosting mobile broadband: Paulo Bernardo, Brazil’s Minister of Communications, and Anne Bouverot, director general of the GSMA signed an agreement to accelerate the adoption of mobile broadband and the delivery of new mobile services in Brazil, such as mHealth, mMoney and mEducation. Together, they are set to accelerate the adoption of mobile broadband networks and services across the country.
Additionally, the GSMA and all of Brazil’s mobile operators — Algar Telecom, Claro, Nextel, Oi, Sercomtel, TIM Brasil and Vivo — announced their collaboration to provide users with safer, more secure and convenient mobile experiences through a set of initiatives that address issues such as controlling SMS spam, reducing handset theft handset theft and enhancing child protection.
Emerging smartphones: The present and future smartphone growth is supported by emerging markets, IDC noted. In 2013, the worldwide smartphone market surpassed 1 billion units shipped, up from 752 million in 2012. This boom has been mainly powered by the China market, which has tripled in size over the last three years.
Emerging markets in Asia/Pacific outside of China, together with the Middle East and Africa, Central and Eastern Europe, and Latin America, account for four fifths of the global feature phone market, according to IDC data. As noted by Simon Baker, program manager for mobile phones at IDC CEMA, some 660 million feature phones were shipped last year, which means the feature phone market was two thirds the size of the current global smartphone market.
More news from Latin America
- Colombian telecommunications regulator (CRC) has determined that Claro (Comcel), Movistar and Tigo will give Avantel access and use of the essential facility of National Automatic Roaming. The CRC has given a calendar month for operators to implement this measure.
- In Brazil, local fixed calls to mobile lines will become about 13% cheaper starting in March, Anatel posted.
- Oi announced the consolidation of its activities and businesses with Portugal Telecom. The company filed a material fact explaining the operation. The company said that the combination will create a multinational telecom operator with operations covering a total population of 260 million people and more than 100 million clients. Also, the new group will aim to achieve significant economies of scale, maximize operational synergies and add value for shareholders, customers and employees.
- Oialso selected F5 Diameter Signaling Solution to meet the diameter signaling management demands of their LTE network.
