Telefonica is increasingly boosting its global leverage over the mobile ecosystem by signing new operators to its Partners Programme, which ‘ among other things ‘ can drive industry standards and negotiate large-scale device deals. Its latest recruit it MegaFon of Russia, which will be tapping in to the Spanish giant’s scale and expertise as it starts to roll out its 4G services.
MegaFon is an ideal partner for Telefonica’s alliance, bringing the opportunity for increased influence, roaming and joint procurement in one of the world’s largest high-growth telecoms markets. The two operators said they had agreed to ‘facilitate cost optimization in equipment purchases via joint procurement’ and exchange technological knowhow.
The firms will also use one another’s networks to offer services to multinational corporate clients and support business roaming.
The Partner Program now covers 52 countries with combined population of 1.5bn, says Telefonica. Flagship members are China Unicom and Telecom Italia, in which the Spanish group holds equity stakes, and others include Etisalat of UAE and Bouygues Telecom.
These alliances are increasingly important for major operators, allowing them to expand their global roaming footprint and their influence on technologies and branding, without actually investing in local subsidiaries. They are also important for second tier or emerging market players, helping them boost their scale and buying power, and often giving them access to R&D projects and roaming networks. For the powerhouses of the emerging economies, they provide access to markets which they would otherwise struggle to penetrate because the incumbents are so well established.
Telefonica has been broadening the reach of its Program, and of other strategic alliances like its deal with NTT Docomo, beyond traditional areas like procurement and roaming, to reflect its increasing focus on new digital services. It aims to work with its allies on ‘digital growth opportunities such as M2M, financial services or cloud-based services’. Its latest deal will encourage Mozilla, which counts Telefonica as the primary carrier backer of its upcoming Firefox Mobile platform, an OS that is being targeted initially at emerging markets.