Telefonica and MegaFon form strategic partnership

Spain’s Telefonica and Russia’s MegaFon have announced details of a new strategic partnership designed to lower operating costs and spur innovation.

The deal brings together Spain’s former state-owned monopoly and the third-biggest mobile-phone operator in Russia, behind MTS (Moscow, Russia) and VimpelCom (Amsterdam, Netherlands), and will see the two companies team up on procurement to lower the cost of equipment purchases and also exchange technological know-how.

Spain’s Telefonica and Russia’s MegaFon have announced details of a new strategic partnership designed to lower operating costs and spur innovation.

The deal brings together Spain’s former state-owned monopoly and the third-biggest mobile-phone operator in Russia, behind MTS (Moscow, Russia) and VimpelCom (Amsterdam, Netherlands), and will see the two companies team up on procurement to lower the cost of equipment purchases and also exchange technological know-how.

MegaFon (Moscow, Russia) is to join Telefonica’s Partner Programme, allowing it to benefit from the scale of the Spanish operator, which runs networks across Europe and Latin America.

The Partner Programme already includes operators such as China Unicom (Beijing, China) and Telecom Italia (Rome, Italy) and has a footprint of 52 countries and 1.5 billion people, claims Telefonica.

Telefonica (Madrid, Spain) says it will also provide services to multinational corporate clients using MegaFon’s network and to MegaFon’s business customers travelling abroad.

In the future, Telefonica and MegaFon say they may also cooperate on launching and monetizing new products and services in areas like cloud computing and M2M.

“We are committed to jointly work to take advantage of our outstanding strategic alignment and to make available the benefits of Telefonica’s scale and breadth of business through the Telefonica Partners Programme, as well as to tackle together the challenges the industry transition is posing to operators worldwide,” said Eduardo Navarro, Telefonica’s chief strategy and alliances officer.

The arrangement will help MegaFon tap into the vast international experience of Telefonica as the Russian player looks to increase revenues from internet and other value-added services.

It should also help to improve profitability at under-pressure Telefonica, which reported a 17.7% fall in operating income, to €2.1 billion, for the first three months of 2013.