Telefónica wants to gain weight in digital services in Brazil, both aimed at consumers and companies. And that is why the operator negotiates several acquisitions of companies specialized in sectors such as ‘fintech’, education or energy. It has already disbursed just over 22 million euros for the consultancy specialized in Vita network integration. The Spanish group has already made a significant effort in the United Kingdom for a couple of years, another of its priority markets.
“We are looking for acquisitions in the same areas that we are considering for Vivo Ventures,” Telefónica Brasil CEO Christian Gebara explained during the conference call with analysts. He is referring to the venture capital arm that he built a few months ago with almost 60 million euros to invest in startups. Specifically, they track in areas such as ‘fintech’, education, energy and other areas in which they are investigating. “We are open and we talk to different companies, we will have news in the coming quarters,” he added.
The priority objective is to focus these acquisitions on direct services to the consumer and not so much for companies. This second chapter was already reinforced last year when the acquisition of the Vita IT consultancy was carried out. It is a consultancy specialized in digital transformation specialized in network integration and one of the key partners for the implementation of American Cisco technologies in the country. The teleco understands that there is a long way to go in this corporate market, with growth of more than 30%.
These acquisitions are outside of those that Telefónica Tech, the group’s technological and digital services arm, has withdrawn on a global scale. Only last year they paid up to 350 million -including possible variable remuneration- to take over the German BE-Terna (key partner for the construction of Microsoft infrastructure in small and medium-sized companies) and almost 210 million euros for the British company specialized in transforming digital and incremental data analysis. “They are acquiring companies globally,” says the country’s CEO.
The Brazilian executive explains the operation of this structure divided between the Telefónica Tech arm -with cybersecurity, cloud and ‘big data’- and the operators of each of the countries. As already discussed internally, if the billing was exclusive to each of these subsidiaries, the divisions of key markets such as Brazil or Spain would go up. they [el grupo] They are creating independent businesses focused on product development and commercial alliances but not on sales, since sales are made by the operator in our case”, he adds. He insists that the final billing to the client is done by Telefónica Brasil and not Tech. Efforts to seek investors among funds and other industrial shareholders in this area led by José Cerdán slowed down while waiting to perfect all the gears and internal functioning.
The purchases that Telefónica Brasil is now preparing will be complementary to the activity being carried out by the venture capital fund Vivo Ventures, launched last year. Specifically, it is endowed with almost 60 million euros (320 million Brazilian reais) and plans to support local startups in initial stages. In fact, in the year 2022 it has already obtained rounds from two companies. The last one became effective in December: Klubi, a platform that grants financing to groups of interested in acquiring cars in the long term, called consortia. He led a round of just under 2 million euros.
While looking for purchase opportunities, the Brazilian subsidiary continues to work on the integration of local mobile operator Oi into its structures. The part that corresponded to Telefónica of the business -customers and spectrum- in the consortium with TIM and Carlos Slim (Claro) was integrated through a company called Garliava. They hope to incorporate it definitively during the first quarter of this year, unlocking some savings and tax write-offs from the goodwill. These efforts are outside the requested requirement to try to cut the price to pay as much as possible.
This price saving through compensation, for understanding that the delivered assets were overvalued, has been reflected in the incorporation of some of those lines acquired by Telefónica to its network. As Gebara acknowledges to analysts, during 2022 they have added 14 million new mobile customers, almost 17% more than the previous year. It must be taken into account that there are 3.4 million inactive Oi lines, of which 339,000 have had to be eliminated. The company has tried to wink at investors in the country – the subsidiary is listed and apart from the teleco has other shareholders – with a share repurchase, an increase in dividends and a capital reduction. The year closed with revenues of 8,600 million euros, 9% more.