Telefonica Digital talks-up early successes; aims to double revenue by 2015 - Mobile World Live

Telefonica Digital talks-up early successes; aims to double revenue by 2015

05 JUL 2012

Telefonica Digital unveiled ambitious plans to more than double revenues over the next three years, while also announcing progress in areas such as operator billing, HTML5-based smartphones and mobile advertising.

Speaking at an investor event in London this morning, CEO Matthew Key (pictured) said the 9-month old Digital unit is currently growing at 20 percent a year and is on track to become a EUR5 billion revenue business by 2015, up from EUR2.4 billion today. “We are positioned at the centre of the digital economy,” he told reporters.

Key talked up the word-of-mouth success of the recently-launched ‘TU Me’ communications app (launched on iOS in May and Android in June), which he says has attracted 250,000 global users “with no marketing at all.” He claims the service was developed and launched in just 100 days, demonstrating a departure from the slow-to-market approach that often dogs operator-led efforts.

“We operate in a different way to the operator, we are all about devolved decision making,” he added. 

But Key insisted that the unit was fully “integrated” with the Telefonica operator businesses across Europe and Latin America. “We will not be successful without the operator businesses, and they will not be successful without us,” he said.

He also noted also that Telefonica Digital did “not want to become the next Facebook or Google” nor get into hardware or act solely as a financial investor in digital start-ups. 

Among the announcements made this morning were global agreements with Facebook, Google, Microsoft and RIM to offer so-called ‘direct-to-bill’ payments for digital goods. The service is expected to be live in 14 Telefonica markets by year-end.

A partnership was also announced with UAE-based operator group Etisalat (which has also recently formed its own Digital unit) to collaborate in areas such as M2M, financial services, cloud computing and video services across their combined footprint.

The final announcement concerned a “multi-million euro” investment in Brazil (via Telefonica’s Vivo arm) to launch mobile advertising services, which will be based on Telefonica UK’s successful O2 Media unit that has been up-and-running for two years. Other services developed in Europe in areas such as ehealth and securities are also set to be exported to Latin America, Key said.

Key also updated on Telefonica’s Wayra start-up fund, which he says has made investments in 140 businesses across 11 countries to date, investing about US$50,000 in each.

Elsewhere, Key provided some additional colour on this week’s announcement that Telefonica is one of seven global operators backing Mozilla’s planned HTML5-based platform for mobile handsets, Firefox OS.  
  
Key said the new devices will allow Telefonica to “accelerate smartphone penetration,” while at the same diversifying its smartphone portfolio. “It’s unhealthy to be reliant on one player,” he said. “In Latin America we are over-reliant on Android, so this will allow us to rebalance.” 

While limited handset supplier support to date, Key said that the partners in the Firefox OS initiative were “in advanced discussions with five or six others.”