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27 May 2013 16:18
MOSCOW. May 27 (Interfax) - Russian "big three" mobile operator Megafon and Spanish Telefonica S.A. have signed a strategic partnership agreement covering joint procurement of equipment, reciprocal roaming services and the exchange of technical know-how, Megafon said in a press release.
Talks on the partnership agreement began in January 2013, Megafon CEO Ivan Tavrin said at the agreement signing ceremony. Megafon chose Telefonica because of its wealth of experience working with subscribers and its extensive partnership territory.
The agreement will facilitate cost optimization in equipment purchases, Tavrin said, without specifying the size of the savings.
The alliance will encompass financial systems, M2M services, cloud services and mobile advertizing, said Eduardo Navarro, Telefonica's chief strategy and alliances officer. Two of the companies' subsidiaries - Megalabs and Telefonica Digital - will draw up a road map for cooperation going forward, he said.
Megafon will provide its services to Telefonica's international corporate clients, which will reciprocate in allowing Megafon clients to use its partnership network, which includes operators in 52 countries.
"This will have a beneficial impact on the final price paid by Megafon clients," Tavrin said when asked how the company's roaming charges would be affected.
Megafon Executive Director Mikhail Dubin reiterated that the company has no plans to independently expand onto foreign markets.
"We received very many questions back during the IPO concerning our strategy: 'Do we plan to expand beyond Russia?' We don't plan to. As was said then, over 99% of revenue comes from Russia. Therefore we will retain our focus on Russia. At the same time, we believe there are a certain number of synergies from seeing what is happening in other parts of the world. But for that there is no need to enter the market there. We believe the partnership agreement [with Telefonica] covers us for those synergies," Dubin told Interfax.
The partnership with Telefonica is not exclusionary, but is does cover Megafon's main needs under such cooperation.
"We conducted preliminary screening prior to entering into partnership with Telefonica," Megafon strategy director Alexander Bolshakov said. "That is, we spoke with many companies, made a lot of visits, analyzed a lot of information," he said.
"We saw that our strategy, and Telefonica's, are quite similar," Bolshakov said.
In addition, Telefonica has the second largest partnership program after another major European player, Vodaphone.
Vodafone has a partnership agreement with one of Megafon's Russian competitors, Mobile TeleSystems (MTS) . Their partnership agreement, signed in 2008, was automatically extended for another four-year period in October 2012. Alongside purchasing and roaming, it covers cooperation in developing retail. MTS currently has the largest retail network among Russian mobile operators: 4,400 retail locations as of the end of the first quarter.
The partnership agreement with Megafon will put Telefonica very near to or ahead of Vodafone in terms of volume, Bolshakov said.
Telefonica S.A. is one of the top five mobile operators worldwide by subscriber base, which currently amounts to about 316 million people in 24 countries. Alongside its base in Spain, Telefonica has strategic markets in elsewhere in Europe and in Latin America.
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