Snapshots and insights from this Telefónicawatchreport…

Report: #119
Covering: September 2017
Next report: October 2017


Telefónica publishes report card on UNICA

Telefónica Group commissioned and published a report from Analysys Mason, which examines and assesses the progress of the Group’s virtualisation programme, and the effectiveness of the UNICA project. Read more…

  • OpenStack commitment still at the core of UNICA drive.
  • Education and skills development needed throughout UNICA ecosystem to accelerate progress on the virtualisation frontier.
  • UNICA future to also entail internal evangelising co‑existing with external efforts to bring good news of virtualisation benefits to the customer base.

ElevenPaths signs global FMaaS agreement with Subex

Subex is to provide the basis for a new offering from Telefónica’s ElevenPaths cybersecurity unit under an apparent new global framework agreement between the Telefónica unit and the revenue assurance-focused solutions provider. Read more…

  • ElevenPaths continues to build up its product portfolio with the integration of a Subex solution suitable for Telefónica’s corporate and carrier customers.
  • Global agreement follows deployments in Latin America.

Hispanoamérica device distribution via CELISTICS extended

Telefónica extended its Latin America partnership with Miami-based distributor CELISTICS through to 2020, with projected volume of 14 million devices over the period and injection of additional reverse logistics capability. Read more…

  • Encompasses eight nations (not Argentina, Brazil, or Chile).
  • Unclear if agreement represents whole or just part of regional device distribution via CELISTICS.
  • Service provider also has retail and regeneration deals with Telefónica, possibly also top-up and international logistics.
  • Telefónica historically CELISTICS’ largest client.

Telefónica testing VoLTE between Argentina and Brazil

Telefónica has claimed it is undertaking tests of international roaming for voice‑over‑LTE (VoLTE) users on its network, which would enable customers to use VoLTE when making calls from overseas networks. Read more…

  • LatAm VoLTE roaming an indicator of ongoing core virtualisation projects in the region.
  • Tests of VoLTE over disparate networks appear at an early stage, with publicity prompted by rival’s boasts.

Telefónica Deutschland shuffles management as Empey departs

The previously reported, then denied, departure of Rachel Empey from her role as Chief Financial Officer (CFO) at Telefónica Deutschland to join healthcare company Fresnius in the same position finally took place at the start of August 2017. In an announcement prior to the reporting of the operating business’s latest results (see separate report), it was confirmed that Empey was leaving, with Markus Rolle, Controlling Director at the business, stepping in to the role. Read more…
  • Former E‑Plus hire Markus Rolle to replace departing Rachel Empey as CFO for Telefónica Deutschland.
  • Management streamlining accompanies CFO change, with layer of management removed.

 


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Table of Contents

EXECUTIVE BRIEF

GROUP

MANAGEMENT UPDATE

Vilá becomes Álvarez-Pallete gatekeeper
Figure 1 Telefónica senior executive power map, August 2017
Álvarez-Pallete shakes off direct reports
Influence of Alonso maintained as Álvarez-Pallete manages twin streams
Disruption stuck in isolation, or thriving in a safe space?
CCDO downgraded; de Beer primed for bigger things
Blanco expands remit as Jordan departs
Linares fades further, but digital transformation legacy remains
Other departures erase Alierta influence

H1 FY17: Telefónica ups expectations on solid foundations
Telefónica’s hopefully intelligent bet
Future ambitions underline need for success in meeting current goals
Table 1 Telefónica, selected financial data, H1 FY17

Guidance raised as revenue picks up
Cash to remain king, Spain the real deal
Debt still high, but Telefónica and analysts aclimatising to the altitude
Figure 2 Organic OIBDA growth trend for key Hispanoamérica markets, Q2FY16-Q2FY17

Latin America stars, as Spain gets ready to fight
Spain getting competitive, sterling performance in UK
Table 2 Telefónica Group, performance by unit, Q2 FY17
Table 3 Telefónica Hispanoamérica, performance by country, Q2 FY17
Undervalued Argentina may yet see a partial sell-off
Venezuela situation gets worse, again
Figure 3 Telefónica Group digital services revenue, FY16-H1FY17
Figure 4 Average monthly mobile data consumption per customer

Further developments of note
Table 4 Telefónica Group, customer numbers (‘000), Q2 FY17

Associates and investments

Rumours build as ex-Vivo CEO to head Telecom Italia
Genish faces restrictions on Italian job
Genish role prompts speculation, and draws Alierta from shadows…
… but Telefónica priorities may have moved on from empire building
Table 5 People movement highlights

GLOBAL RESOURCES

eSIM

Telefónica links up with eSIM partners
OT-Morpho delivers Subscription Manager
Gemalto sticks hand up to stress its involvement
eSIM moving to the fore
Telefónica customer services suppliers come together

Partners & suppliers

Nokia flags up pre-5G work with Telefónica
Telefónica consultant Altran picks up cybersecurity capabilities
Blanco reiterates seal of approval for Nokia

BT to host Telefónica data centre gear

UNICA

Telefónica publishes report card on UNICA
Typical pragmatism, and some resistance, accompanies ambition

DIGITAL SERVICES

Partners

Telefónica ties with Aquto for sponsored data
Aquto joins Datami as Telefónica explores zero-rating and rewards
Wayra-backed AI startup seeks new investment

Security

ElevenPaths signs global FMaaS agreement with Subex
Telefónica and Subex relationship’s Latin roots

LATIN AMERICA

Regional

LatAm device distribution via CELISTICS extended

Argentina

ENACOM allocates 2.5GHz spectrum in Argentina

Brazil

Telefónica testing VoLTE between Argentina and Brazil
Telefónica gets defensive as TIM claims local VoLTE lead

Vivo and Qualcomm reallocating 2G spectrum for 4G use

Vivo embraces IoT services
Research lab to develop additional services

Chile

Telefónica in the mix for submarine state deals

Colombia

Coltel gets house in order with EUR1.85bn recapitalisation
Recapitalisation enables Coltel to move forward
Massive network licensing fine lumped in to Colombia reset
Credit rating goes up, as well as down

Ecuador

Nokia upgrades subscriber systems in Ecuador

Mexico

América Móvil regulation appeal to hit Telefónica income
Telefónica warns of profit impact of drastic rate change
Market reform making progress, slowly

Venezuela

Movistar price hikes blocked again

EUROPE

Germany

Telefónica shuffles management as Empey departs
E-Plus execs take lead in new committee
Sky NOW TV launch in Spain presents Telefónica threat

Spain

Telefónica to appeal EUR25m Vodafone compensation claim
AMC also eying Spanish market…
…Telefónica may also spread its OTT wings
Telefónica questions cost-basis assumptions

UK

O2 calls for compromise as Three takes Ofcom to court
Three UK cloaks itself in flag of consumer fairness
O2 attempts to find a third way…
…but peers may abandon conciliation now that shots have been fired

O2 UK unveils London Eye Wi-Fi network partners
Familiar partners support the contract
From small cells to big wheels

Further reading

Index


Index

Symbols

21st Century Fox
Sky plc 48

A

Aerial Technologies 29
AI 31
Algar Telecom 37
Allot Communications 20
Altran 24
AMC Networks 49
América Móvil 17, 24, 30, 34, 35, 40, 41, 43, 44
Claro 35, 38, 40
– Slim, Carlos 44
– Telcel 30, 44
– Telmex Internacional (Carso Global Telecom SAB)
Teléfonos de México (Telmex) 44
Analysys Mason 26
Anatel 37
Antel 40
Apple 30, 53
Aquto 29, 30
Askey 49
AT&T 19, 30, 43, 44, 52
Autorità per le Garanzie nelle Comunicazioni (AGCOM, Italy) 20

B

BNP Paribas 24
BT Group 20, 25, 31, 50, 51, 52

C

CCS 53, 54
CELISTICS 34
Cisco Systems, Inc 32, 53, 54
CK Hutchison 50
H3G
UK 50, 51, 52
CNMC 48
Coca-Cola 29
CogniCor 31
CommScope 22
Conatel 44

D

Datami 30
Deutsche Telekom 46

E

EMC
VMware 26
ENACOM 35
Engage Hub 47
Entel 38
Ericsson 22, 24, 26, 36
European Union 47, 52
European Commission 31
Evolving Systems 23
Ezentis 24

F

Facebook 39
Fitch, Inc 41
Fitch Ratings 41

G

GCHQ 24, 32
Gemalto 22
Google 30, 53
Grupo Clarín 35
GSM Association (GSMA) 22
Mobile World Congress 8, 22

H

HBO 48, 49
Helvetia Insurance 30
High Court 49
Huawei 36, 38

I

IDC 37
Ideagen 25
IFT (Mexico) 43
Infinera 26
Information Risk Management 24
Intel 22, 24
InterDigital 22

K

KC2 Networks 53
Kibo Ventures 29

L

Lumata Holdings 23

M

Mediaset 19, 20
Mediaset Premium 19
Microsoft 9, 39
Ministry of Defence 24
Mitrastar 49
Mormedi 49

N

Netflix 48, 49
NII Holdings, Inc 35
Nokia 23, 24, 42

O

Ofcom (UK) 50, 51, 52
Oi SA 17
Omnicom Group, Inc
Organic 12, 14
Orange 20, 23, 24, 30, 48
Spain 48
OT-Morpho 22

P

Pacific Caribbean Cable System (PCCS) 39
PAKETIN 25

Q

Qualcomm 37
Quantenna 49

R

Red Hat 26
Regions
APAC
China 24
– – Taiwan 49
EMEA
Austria 48
– – Europe 14, 18, 19, 24, 29, 31, 32, 45, 47, 48, 49, 52
– – France 20, 38
– – Germany 11, 14, 16, 17, 25, 46, 47, 48
– – Ireland 48
– – Italy 18, 19, 20, 48
– – Spain 6, 9, 11, 13, 14, 16, 22, 24, 30, 31, 32, 41, 47, 48, 49
– – Switzerland 47
– – UK 14, 15, 16, 17, 20, 24, 32, 47, 48, 50, 51, 52, 53, 54
Latin America 14, 17, 19, 24, 29, 31, 32, 33, 34, 36, 37, 41, 42, 49
Argentina 13, 14, 15, 16, 17, 34, 35, 36, 37
– – Brazil 9, 11, 14, 15, 16, 17, 18, 19, 26, 29, 32, 34, 35, 36, 37, 38
– – Chile 14, 15, 16, 17, 34, 36, 38, 39
– – Colombia 14, 15, 16, 17, 34, 36, 37, 40, 41
– – Ecuador 34, 42
– – El Salvador 34
– – Guatemala 34
– – Mexico 12, 14, 15, 16, 17, 19, 24, 29, 34, 37, 43, 44
– – Panama 34
– – Peru 14, 15, 16, 17, 24, 34, 38
– – Uruguay 17, 34, 40
– – Venezuela 15, 44
North America
Canada 29, 39
– – USA 26, 29
Research Machines 24

S

Schneider Electric 38
Sigfox 37
Spirent Communications 53
Spreadtrum 24
Subex Ltd 31, 32

T

Technologies
2.5G 35
– 2G 37
– 3G 36, 38, 52
– 4G
LTE 14, 23, 24, 35, 36, 37, 38, 40, 42, 50, 51, 52, 53, 54
5G 12, 22, 23, 24, 25, 27, 50, 51, 54
– Broadband 35, 49, 52
– Business/Operations Support Systems (BSS/OSS) 27, 32
– DTH 16
– eSIM 22
– GSM 22
– Internet of Things 22, 38
– IP 11, 36
– M2M 16, 17, 22, 23, 25, 37
– NB-IoT 37, 38
– NGN 12, 27
– OpenStack 23, 26
– SIM 22, 23, 25
– TV 17, 35, 48, 49
– VoLTE 36
– WLAN
Wi-Fi 29, 42, 53, 54
Telecom Argentina 35
Telecom Italia 17, 18, 19, 20
TIM Brasil 17, 18, 19, 36, 37
Telefónica Group 9, 12, 15, 16, 17, 18, 19, 20, 22, 23, 24, 25, 26, 29, 34, 49, 51
Associates and investments
CounterCraft 32
– – Sigfox 37
– – Telecom Italia 17, 18, 20
Bravo! 11
– Canal+ 20
– Digital 8, 11
– Digital services
Amérigo 29
– – Drivies 30
– – ElevenPaths 31, 32
– – Innovación Alpha 11
– – LUCA 29
– – M2M 16, 17, 22, 25, 37
– – Mobile advertising 47
– – Open Future 11, 29, 32
– – OTT 16, 42, 48, 49
– – Telefónica I+D 30
– – Terra 20
– – Tokbox 20
– – Wayra 11, 31, 32
– – Weve 47
Directors
Linares, Julio 11
Europe
E-Plus 14, 46
– – Germany 47, 52
– – O2 47, 50, 51, 52, 53, 54
– – Spain 9, 13, 15, 16, 17, 20, 48, 49
– – Telefónica Deutschland 23, 25, 46, 47
– – Telefónica NEXT 46, 47
– – UK 13, 25, 47, 50, 51, 52, 53, 54
Executives
Abasolo, Laura 6
– – Alierta, César 6, 9, 11, 16, 19
– – Alonso, Chema 8, 9, 20
– – Álvarez-Pallete Lopez, José María 6, 8, 9, 11, 12, 17, 19
– – Ansaldo, Guillermo 9
– – Blanco, Enrique 9, 24, 27
– – Carbajo, Cayetano 25, 46
– – Daiber, Valentina 46
– – De Beer, Mariano Sebastián 9
– – Eidmann, Guido 46
– – Evans, Mark 50
– – Gerhardt, Nicole 46
– – Gil Díaz, Francisco 43
– – Gilpérez López, Luis Miguel 9
– – Haas, Markus 46
– – Loesing, Alfons 46
– – Martín-Villa, Gonzalo 11
– – Metze, Wolfgang 46
– – Navarro, Eduardo 9, 18
– – Small, Ian 20
– – Vilá, Ángel 6, 13, 15
Ex-executives
Blasco, Luis 11
– – Empey, Rachel 46
– – Genish, Amos 18
– – Jordan, Phil 9
– – Key, Matthew 8
– – Place, Javier 11
Global Resources 11, 17
5TONIC 22
– – Cornerstone Telecommunications Infrastructure 51, 54
– – Global Device Development Centre 49
– – Telco4Telco 13
– – Telefónica Business Solutions 24, 25, 31
– – Telxius 6, 13, 26, 39
– – UNICA 17, 23, 24, 25, 26
Latin America 20, 34, 42
Brazil 14, 18, 35, 37, 38
– – Chile 32, 36
– – Colombia 32, 40
– – Ecuador 42
– – Mexico 14, 23, 29, 37, 43
– – Peru 38
– – Venezuela 44
– – Vivo 18, 35, 37, 38
Movistar+ 48, 49
– Products and services
Fusión 49
– – Movistar+ 48, 49
– – O2 Home 52
– – O2 More 47
– – pay-TV 11, 16, 19, 20, 48, 49
– – SmartM2M 25
Travelex 24

U

Universidad del Desarrollo 36

V

Verizon Communications 30
Verizon Wireless 30
Vivendi SA 18, 19, 20
VMware 26
Vodafone Group 14, 24, 30, 48, 49, 51, 52, 54
Spain 14, 48
– UK 51, 52

W

WND 37
World Bank 41
International Centre for Settlement of Investment Disputes 41

Z

Zegona
Telecable 48
ZTE 36