Telenor and Telefonica have announced a partnership agreement under which they will cooperate to support multinational managed mobility customers in each other's markets.
Telenor will support Telefonica in Norway, Sweden, and Denmark, and Telefonica will support Telenor in the six European and 13 Latin American countries where it has mobile operations.
Telefonica is following through quickly on its partnership strategy
Telefonica Multinational Solutions has been recently building out its capability to support multinational customers. It entered the managed mobility market later than its competitors, but has been making up for lost time.
It set up its central MNC function relatively recently, and in Europe it has been busy setting up offices across Europe outside its core markets, with the pace being set by the need to support some significant MNC contract wins.
Strong partnerships are key to Telefonica’s ability to support its MNC customers in mobile services, as they are for all operators with super-regional ambitions. This is the third such partnership agreement announced by Telefonica in recent weeks.
In July, Telefonica International Wholesale Services announced a sales agency agreement with NTT DoCoMo to collaborate to support the mobility requirements of Japanese MNCs in Europe, starting with the UK and expanding to other countries in the region.
Telefonica has also partnered with Verizon Global Wholesale to provide support to the wireless services requirements of its multinational customers in the US: Telefonica will manage and brand the wireless services it provides to its MNC customers in the US, as well as bundle these with other services that it offers.
But while today’s agreement with Telenor was negotiated and signed by Telefonica International Wholesale Services on behalf of the Telefonica Group, this agreement looks less like a traditional wholesale deal and points to a deeper relationship.
The agreement defines how Telenor and Telefonica will collaborate and support each other in various areas, covering rules of engagement, bid management, products and services, SLAs, and operational processes and systems.
It covers all aspects from presales through to service delivery and customer support. There will be an initial focus on aligning the two operators’ service portfolios and improving their interoperability and operational efficiency.
Interestingly, Telenor previously had an agreement with Vodafone to support multinationals’ mobility needs in Scandinavia, but this agreement ended earlier in 2010. The match between Telenor and Telefonica looks a bit less one-sided in Europe than the one between Telenor and Vodafone: both Telefonica and Telenor claim theirs is a relationship of equals and is flexible in nature.
There are reasons to believe it will pay dividends. For a start, the two operators’ footprints don’t overlap, so there will be no territorial disputes over who leads in MNC bids. And Telenor and Telefonica do not have major potential areas of competition, such as the M2M business, where Vodafone is taking a strong “go-it-alone” stance.
For Telenor, access to Telefonica’s coverage in Latin America opens immediate possibilities. But Telenor has much to offer Telefonica beyond the immediate agreement – while the current partnership covers Telenor’s European markets only, the Scandinavian operator has substantial holdings in Eastern Europe and Asia-Pacific.
Many multinationals would be interested in extending their managed mobility support globally (although many have despaired about ever achieving this aim). Telenor’s forward-thinking and innovative approach to M2M is one example: this is one area of potential collaboration beyond managed mobility, and is surely of interest to Telefonica and some of its MNC customers.
A deal like this offers the potential to get beyond cross-selling to produce technical and service innovation in mobile services.
But in the short term, success in this market will be measured not by future innovation but by the service providers’ ability to deliver on the promise of multinational mobility. The current agreement between Telenor and Telefonica does not yet include a single master services agreement defining common commercial terms in all countries.
Our research with multinationals points to the need for much more well-developed commercial offers for mobile services. SLAs for mobile have improved during the past two years but are still considered immature when compared to those typically associated with global WAN contracts. This is where the partners should focus next.