Aug. 26, 2015

Alfonso Gómez Palacio


Alfonso Gómez Palacio

Executive President, Telefonica

"4G is probably the most important part of our innovation."


Alfonso Gómez Palacio is the Executive President of Telefonica.

Could you provide an overview of growth by segments over the past year?

Telefonica performed incredibly well in 2014 with healthy growth in all areas, and in the mobile sector we grew by double digits. In the post-paid segment we had 8% growth, and 12% in revenues. In fixed operations, it was also a very good year. Our client base was steady, at around 3%, which is impressive for fixed lines, and our revenues grew by 4% in that business line. Our BDA was 10% higher than the previous year. Meanwhile, 2015 is starting out well. It is almost six months in, and we are still growing in pre-paid, post pay, and all the areas not just mobile.

How much of the growth in the mobile business would you say stems from the $350 million you earned in 2013?

Contributions from past earnings remain low, because they are mostly being reinvested in 4G. This coverage is growing, but it is still a small part of our business, relevant to other operators. What is important for us is that the data sector is growing the most. Our investment is responsible for 15-20% of our growth, but data is responsible for at least 40-45%.

What steps are you taking to become the operator of choice in Colombia?

Our recent merger was a success. Right now, we are the first fully integrated operator. This is important, but our ultimate goal is to become a digital telecommunications company, and the first to deliver this growing service to both the consumer and corporate segments. It is also important for us to have digital convergence, and to be part of the digital life of our customers.

How important have your 4G investments been for Telefonica's innovation agenda in Colombia?

4G is probably the most important part of our innovation, and we work in delivering special services. Telefonica works with a special team in security and health, and works vertically with the latter of the two in Colombia. The company wants to be the first digital telecoms provider, which means being central to the digital life of our customers. In this regard, we are working with specialists in those areas to provide services from end to end, especially in security and health. Perhaps three years ago, we started to invest in security on all levels, from connectivity to hacking. In any telecommunications company, you have the traditional services, which are 60-70% of the current revenue. But for us, around 30% of revenues are coming from the digital services like security, health and insurance, and other such areas.

What are the greatest challenges and opportunities of the new digital environment?

The main challenge in our market is the major players, but the good thing is that there are numerous operators. There are at least six to seven operators taking into account Virgin and other companies. Having numerous options is conducive to innovation, but with the major operator, it is a challenge for the regulator to ensure market fairness. Right now we have a less dominated field, and our interest lies in data services concentration because it approximates voice concentration. If there is only one device for voice and data, it is likely that customers will have the same operator for both. The concentration in voice is evolving quickly towards data, which is a major concern for the market, and the regulators.

What are the main objectives and expectations for the group for the next year?

We have to cover many areas. The first is to keep growing our post paid and pre-paid services; here we expect to grow both in revenues and in customer base. Of course in the broadband areas we have room to grow, especially in intermediate cities. We started 2015 on increased growth. We have to develop strategies that make data the main driver of our revenues, which is what we are doing today. Mobile data will be the key in terms of future growth over the next two to three years. We need to create the foundation today to grow soundly tomorrow. We want to take full advantage of the 4G network that we are deploying nationwide. We are going to be present in over 250 municipalities of Colombia. It will change everything because once you have delivered broadband to those towns you can provide a diversity of services.