After 18 months working on the Vivo integration, Telefonica announced that starting April 15 all Brazilian products, including mobile, fixed, pay-TV and broadband services for consumers and enterprise segments, will be re-branded under the Vivo name (which means “Alive” in English). Currently, Brazil is Telefonica’s biggest market globally. The Spanish telecom provider has 90 million clients in the country, U.S.$18.7 billion (R$34.2 billion) in net revenue, an Ebitda margin of 36.3% and a net profit of U.S.$2.7 billion (R$5 billion).
The re-branding follows a global strategy of using Telefonica as an institutional brand, while using Vivo (in Brazil), O2 (in Europe, except Spain) and Movistar (in other Latin America countries and Spain) as a commercial brand.
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However, although Telefonica showed several sales and marketing strategies during an April 12 press conference in São Paulo, the change seems to be a more external one than a background system integration (such as networks, billing software or customer relationship management – CRM).
Talking with journalists, Antonio Carlos Valente, CEO at Telefonica Brazil, noted the complexity of both information technology systems and networks. “We are doing the integration in a secure and realistic way,” he told RCR Wireless News, when asked about seeing clients from both companies as unique parts of what the company purchased. Currently, the most common way enterprises manage customers is by the products and services they have, not viewing them as unique in a single platform.
The complexity mentioned by Valente is a consequence of the history of both telecom operators. Vivo, for example, was launched in April 2003, as the result of the union of seven mobile carriers. Each of them carried their own IT systems. Therefore, the IT system legacy is enormous – even further increasing the difficulty of the total integration.
Some steps have been made. During the latest TM Forum Latin America Summit, held in São Paulo on March 27-28, Cassio Santos, applications and architecture manager at Telefonica, revealed how the synergy was going between fixed-Telefonica and mobile-Vivo from an architecture point of view.
“They are two big telecom companies that had different strategies in the past,” he said, adding they picked up the best practices that were implemented in both companies over the years. IT teams from both enterprises mapped the systems of each. They identified several systems with the same business functionality and many that needed to be updated.
To build a unifed system, Santos pointed out that it is necessary to analyze all systems, make recommendations and then work with the organizational culture in order to avoid or minimize problems.
At the same event, Agenor Leão, Vivo’s development director, explained that the mobile carrier has worked for the past three years (thus, before it was purchased by Telefonica) to improve its IT toward becoming a service-oriented architecture (SOA) with the goal of centralizing systems like enterprise resource planning (ERP), CRM and data warehouse.
The SOA implementation was in 2007, when CRM integration also began at Vivo. “We had many different technologies running. It was a really complex environment to develop and maintain,” he said. According to Leão, now SOA is stable and presenting results such as reducing service time in Vivo’s stores by 34%, decreasing time-to-market by 30% and dropping the costs of new IT developments for new demand by 50%.
Paulo Cesar Teixeira, general manager at Telefonica Brazil, said that the integration will be transparent for customers. All communication with clients will be under Vivo’s brand, but clients will continue to receive separate bills. However, Teixeira added, the company will give discounts to people who have more than one service. As an example, he said fixed broadband clients will receive 50% off mobile broadband services.
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