When Novator’s telecoms team, PLAY’s launch CEO Chris B., and PLAY’s deputy CTO Stefan E. were visiting Chilean vineyards by helicopter in December 2014, we knew they were up to something! Since neither the British nor the Swedes grow much wine, they must be looking for growth of another, more familiar type! Like another mobile company to disrupt a noncompetitive, oligopolistic market, in order to create compelling services and products for people to get on with their lives, facilitated by great and inexpensive mobile voice and data services.
By May 2015, Alex was in Santiago de Chile for the first time, taking a detailed look as to how to raise bank financing for the company acquired, Nextel Chile, where American investors had managed to burn through USD 1 billion of cash and had nothing to show for it but 200k subscribers, 1,000 base stations, a handful of empty stores, 600 demotivated staff, and a near-bankrupt company.
Well, Chris and his successor Joergen, and their teams, supported by Novator’s seasoned experts, had built the most acclaimed European mobile challenger in PLAY, so ‘more of the same’ was not going to be on the cards once Novator bought the company in January 2015, and Chris rebranded it into WOM (for ‘Word of Mouth’) in July 2015.
As of mid-2018, WOM has exceeded 4m subscribers in this 18m population market, adding on a monthly basis more than Nextel bequeathed to Novator, with 2,000 highly motivated employees, 200+ stores where customers queue to be served, and a kick-ass brand that has taken young Chile by storm.
Prices for mobile data have dropped by 96% thanks to WOM's aggressive price positioning. The price for 1GB has declined from CLP 28k (~USD 45) as of May 2015 to CLP 1k (~USD 1.7) as of October 2017, as a result of WOM’s value-for-money market offerings. Given the importance of mobile internet for hundreds of thousands of small business and home office workers, the impact of this quantum leap in competitive mobile services cannot be overstated.
Chile, which is a wonderful country blessed by nature, and which for many years was relatively isolated in Latin America thanks to the high Andes mountains on its eastern border with Argentina, has recovered from the Pinochet dictatorship of the 1970s and 1980s. But in the structure of many of its industries, the old regime still casts a shadow, with limited levels of competition among a few oligopolistic companies in many sectors. WOM's hugely successful and relished push for more value, transparency, customer benefits and consumer choice has opened up awareness in Chile about how more competition might benefit society across a range of industries. WOM has just been named among the top 10 preferred employers in Chile, a mere three years after being reinvented.
The LF Team advising WOM and Novator, comprised entirely of PLAY veterans and alumni, and led for the most part by Piotr Jegier, has been privileged to work with WOM's management team and Novator, as well as withWOM's competitively chosen vendors and their banks, to structure three attractive senior financings exceeding USD 300m, in order to finance the build-out of WOM's 4G mobile network. This has no doubt been LF’s most global project to date, with a Chilean borrower and Chilean lawyers in Latam, English-law lawyers in London and Hong Kong, the vendor and its bank in Shenzhen and Beijing – and many days at most one hour of daylight shared between these three time zones for the umpteen confcalls necessary to get the deal to the finish line. There’s nothing a good team based in Warsaw cannot get done!