Telefónica re-organises in Latin America, Group
10 November 2010
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Extract from Telefonicawatch, report #50. Click through for: the Executive Brief from this month’s report; the Report Snapshot; or to contact us for more information about the full 50-page report, this industry standard monthly report service, and ongoing subscription access.
OPERATIONS
Telefónica re-organises in Latin America…
Telefónica Group announced a reorganisation of the structure of Telefónica Latinoamérica, its division covering operations in Latin America. The region, which until now has had country based management reporting to a Board-level director, José María Álvarez Pallete, has been moving towards more regional integration; and the new structure is intended to enable that continued integration, while also grouping operating companies that can be seen as having similar operations.
The new three part division can almost be seen as a reflection of the Group in miniature, where there are three divisions comprising the Group’s: largest single market, Spain; its principally mobile focused European businesses; and its growth centre in Latin America. In Latin America, the new structure will see operations in Brazil form a single unit, which will require significant attention as existing fixed line businesses are merged with the now wholly controlled Vivo mobile business. Brazil is the single largest market in which Telefónica is present on the continent. Carlos Valente will remain President for Telefónica in Brazil, and his role will reportedly reflect institutional responsibilities traditionally held by the Chairman role, while Luis Miguel Gilpérez Lopez, currently responsible for mobile operations across Latin America, will take on the more operational role of Chief Executive in Brazil.
A second unit is to combine operations in Argentina, Chile, Colombia, Ecuador, Peru, and Uruguay, where Telefónica is already present in both fixed line and mobile sectors, and is merging its operations into a single business under the Movistar brand (Telefónicawatch, passim). Eduardo Caride will lead the integrated operators group, and will be replaced in the role of President of Telefónica de Argentina by Luis Blasco.
The final division will comprise operations in Central America, Mexico, and Venezuela. Telefónica’s presence in these countries is predominantly as a challenger mobile operator, and these markets present some of the more challenging conditions within which the telco operates in the region. Jaime Smith, a Telefónica executive who has held key positions across the Group (coming from senior roles in Spain to lead the integration of assets in Czech Republic, before moving to O2 in Germany to oversee the unit’s recovery, then taking on a strategic Group role reporting to the Executive Chairman on industrial alliances — Telefónicawatch, 2009.04), will be responsible for these mobile only areas where Telefónica faces its most operationally and politically complex competitive environments.
In Venezuela, Telefónica has had long standing problems in repatriating funds from a profitable second placed mobile player, and publicised the suspension of some international roaming services due to government restrictions on the purchase of foreign currency (Telefónicawatch, 2010.09/#49). Mexico is an important growth market for Telefónica, where it is the second player but dwarfed by a powerful incumbent, and is waging an ongoing campaign with the government and regulator to open up the market to competition more effectively. It is also partnering fixed line and pay TV players, has invested in fixed line infrastructure (Telefónicawatch, 2010.06), and recently won additional mobile spectrum (Telefónicawatch, 2010.09/#49).
…with changes also implemented at Group level
Changes to the overall management of Telefónica Group are reported to be taking place at the same time as the Latin America reorganisation. Santiago Fernandez Valbuena, Group Chief Financial Officer, is being given responsibility for Group Strategy and Direction.
Telefónicawatch has noted that at each of the past three major Investor Day update events held by Telefónica, Valbuena has pushed the significance of the Finance department in proactively creating business opportunities and driving development of the business, and it now appears that these efforts are being formalised. Three executives are to report to Valbuena in his new expanded role, with Eduardo Navarro, who has previously held roles within Telefónica Latinoamérica, responsible for strategy, Angel Vila, a long term corporate development executive at Group level, managing Development and Affiliates, and Miguel Escrig in Finance.
Changes are also taking place in the management of Telefónica’s Spanish division. Adrián García Nevado, formerly a senior executive in Telefónica’s Central American operations, has been named head of Business, and Kim Faura, formerly General Manager for Telefónica in Catalonia, is now managing Territorial and Corporate Relations.
[Further reference: Cambios en la estructura organizacional de Telefónica -- Telefónica, 28 September 2010; Alierta reorganiza Telefónica para potenciar Latinoamérica y el área financiera -- Cinco Días, 28 September 2010.]
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Report: #50
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Published: November 2010
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