Digicel partners with Turkish telco to return to growth
Debt-ridden Caribbean and Central American telco Digicel is aiming to "get back to growth" through a commercial partnership with Turkey's largest mobile operator Turkcell.
Digicel will deploy Turkcell's Lifecell smart digital service platform, Digicel Group chairman Denis O'Brien said on Wednesday.
Speaking at a joint press conference at the Mobile World Congress in Barcelona, O'Brien said he wants to "get away from raw data" to provide a better customer experience to generate "increased growth rates."
Digicel, which has debt of US$6.7bn, reached an agreement in January with 98% of bondholders to extend the payback dates by two years to 2022 and 2024 for two bonds worth a total of US$3bn.
While the agreement buys Digicel a little time, the clock is ticking for the company to ramp up growth and generate customer loyalty through new services.
This comes at a time of heightened competition from a revitalized Caribbean Cable & Wireless Communications, Digicel's main competitor, which has been strengthened after being bought by Liberty Latin America. Meanwhile, in Central America, Millicom is on an M&A and investment drive.
LIFECELL
Digicel will rollout Lifecell digital services platform, a series of apps developed in-house by Turkcell to compete with established over-the-top apps. It includes BiP, a messaging platform akin to WhatsApp; Fizy, a music platform similar to Spotify; Kopilot, a driving performance monitoring app; invoice payment app Paycell, and search engine Yaani.
Another app, Dronecell, offers a temporary, mobile 4.5G moving base station to provide coverage during emergency situations when other infrastructure is down.
The rollout will begin in Digicel's French West Indies operation mid-year, with gradual rollout across the company's 32 markets in the Caribbean, El Salvador and Panama and Pacific Islands.
But why would a Caribbean customer prefer to change their WhatsApp or Spotify to a new, little-known app developed by a Turkish telco?
According to Aileen Corrigan, CEO of Trend, a digital services unit of Digicel, the Lifecell apps provide much more than their mainstream competitors.
While WhatsApp compresses photos, you can send full resolution pictures through BiP, as well as make app-to-network calls.
The differentiator of music service Fizy is that the app incorporates live streaming, local and user generated content that is not available on Spotify.
"Almost 80% of music consumed in the Caribbean is local. Spotify doesn't have local artists. With Lifecell we can plug in live concerts, carnivals, reggae. That is critical. But in addition we also have global deals for mainstream music," Corrigan told BNamericas.
"For TV we can stream live cricket games or other live sports, which is hugely relevant. That is a big differentiator from other video players."
The platform also comes with artificial intelligence so that customer preferences can be monitored and content suggestions made.
Digicel says it has invested some US$1.65bn in rolling out fiber to the home (FTTH) and LTE connectivity. LTE is available in 28 of its 32 markets.
"Now we have got to move on to a real value proposition, learning from Turkcell, but observing each market and tweaking it accordingly," Corrigan said.
Some integration with Turkcell will be needed, but all the content is in the cloud and should be easy to deploy.
The challenge to operators' revenues from OTT players has been a major headache for telcos. While many have chosen to simply ally with the OTT players, some, like América Móvil and Telefónica, have also developed their own video and music streaming platforms, online payment apps and others. However, the jury is still out as to what extent they can compete with the likes of Netflix.
"We're competing with OTTs. They've come into our space and we need to fight back," Corrigan said.
A DIGITAL PIONEER CHALLENGING THE OTTS
Turkcell has been a pioneer in the telecoms industry in challenging OTTs. It has made significant investments, while 20% of its workforce is focused on R&D. While this is a major risk, the results show the bet has paid off, says Turkcell's CEO Kaan Terzioğlu.
In a presentation, Terzioğlu said Turkcell is the fastest growing telco worldwide and saw 20.8% growth in revenues in 2018.
In terms of usage Lifecell, subscribers spend 81 minutes per day watching video content, 48 minutes listening to music, 31 minutes talking on calls, 18 minutes reading and upload 41 documents.
"It requires a different business model and organizational structure. Not many telcos invest in these areas. But through partnerships you can bring a very valuable asset that would take years to build otherwise," the executive told BNamericas.
Terzioğlu said he ignored criticisms that he was wasting money by developing apps to compete with first mover and established players like Whatsapp.
"It's a completely new way of delivering a service. When a telecom operator provides a service like BiP, which is really aligned to its IMS system, meaning it really becomes your telephone number, users will drop WhatsApp like that," he said, adding that in the future telcos will have three major revenue streams: ID management, mobile payments and traffic management.
Subscribe to the leading business intelligence platform in Latin America with different tools for Providers, Contractors, Operators, Government, Legal, Financial and Insurance industries.
News in: ICT
Process of activating Infovia connecting Belém to Macapá with fiber begins
Activation comes following the cable deployment. The vessel took 19 days to pass the cabling along the Amazon riverbed, less than expected, due to ...
Brazil M&A transactions down 4% in Q1
Brazil accounted for 63.4% of all M&A transactions announced in Latin America in the first quarter, while Mexico represented 13.8%, Chile 8.9%, Arg...
Subscribe to Latin America’s most trusted business intelligence platform.
Other projects in: ICT
Get critical information about thousands of ICT projects in Latin America: what stages they're in, capex, related companies, contacts and more.
- Project: SCL02 - SCL03 Data Center
- Current stage:
- Updated:
3 hours ago
- Project: Cable Submarino Caribbean Express (CX)
- Current stage:
- Updated:
19 hours ago
- Project: Submarine Cable Aurora
- Current stage:
- Updated:
1 day ago
- Project: TAM-1 submarine cable system (Ex Trans Caribbean Fiber System)
- Current stage:
- Updated:
3 days ago
- Project: Microsoft Project SCL03
- Current stage:
- Updated:
3 days ago
- Project: Microsoft Cloud Region (Azure Region)
- Current stage:
- Updated:
3 days ago
- Project: FON project (five of the six macrozones)
- Current stage:
- Updated:
1 week ago
- Project: Optical Mesh - Santos Basin
- Current stage:
- Updated:
1 week ago
- Project: KIO MTY 2 Data Center
- Current stage:
- Updated:
2 weeks ago
- Project: Expansion of SAO1 Data Center (Cirion Data Center in Cotia)
- Current stage:
- Updated:
2 weeks ago
Other companies in: ICT
Get critical information about thousands of ICT companies in Latin America: their projects, contacts, shareholders, related news and more.
- Company: Soluti Soluções Em Negócios Inteligentes S.A.  (Soluti Digital)
-
The description contained in this profile was taken directly from an official source and has not been edited or modified by BNamericas researchers, but may have been automatical...
- Company: Alfanar Group
- Company: Huawei Technologies Uruguay S.A
- Company: Empresa Nacional de Telecomunicaciones S.A.  (Entel Chile)
-
Chilean telecommunications company Entel Chile -former state-run long distance monopoly- offers fixed and mobile telephony services as well as broadband and data center services...
- Company: Aligned Data Centers, LLC  (Aligned)
-
The description included in this profile was taken directly from an official source and has not been modified or edited by the BNamericas’ researchers. However, it may have been...
- Company: Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V.  (Ideal)
-
Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V. (Ideal) is a Mexican engineering and construction parent company, established in 2005 for designing, devel...
- Company: BOOST Mission Critical Engineering - EBM Engenharia
-
BOOST Mission Critical Engineering - EBM Engineering is a partnership formed by BOOST Mission Critical Engineering and EBM Engineering Ltda. for the execution of the project Dat...