Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Thursday, June 10, 2021

Wom replicates its strategies applied in Chile and aims to change the style of competition in Colombia

After completing interconnections with existing operators, a process in which the CRC had to intervene, Wom's project is to have 8,000 antennas in the next three years and arrive with 4G coverage in 1,100 municipalities. The merger with Avantel opens up a question mark about Wom's status as an "entrant" in the market.

The operator made its debut in the Colombian market with prepaid and postpaid offers and the sale of cellular devices in its stores, in which it seeks to have the same or lower price than in chain stores or other operators. It is known so far that it received 210,000 registrations during February and March and has 1,800 employees, which will increase to 2,500 by the end of the year. Through its website it enabled a registry for interested persons to receive information about the services it will offer in the country and if they decide to do their number portability to Wom, the company will give them a free month on postpaid mobile plans. Those who decide to carry their number will receive two months for free.

Thus, Wom seeks to replicate in Colombia the strategy it applied in Chile, a country in which it led number portability statistics on several occasions. There, the operator conquered a mobile market share of 20% in 2020, five years after landing. Its strategy was characterized by lowering prices and implementing intense advertising campaigns.

This path was replicated in Colombia, through a controversial campaign, which was fined for using the term "Clavostar" in its advertisements, to refer to its competition: Claro and Movistar. Immediately, the SIC (Superintendency of Industry and Commerce) initiated an investigation against Partners Telecom Colombia, the company that owns the brand, for alleged violation of consumer protection regulations regarding the "Clavostar" campaign.

Wom clarified before this call that "Clavostar" is an initiative designed and executed by Wom in Colombia with the aim of making visible, through parody and satire, the injustices of mobile telephony in the country: "This strategy uses exaggeration and sarcasm, presenting 'Clavostar' as another (fictitious) telecommunications company that delivers more of the same, that does not listen to the needs of users, nor does it strive to improve its services, since its main purpose is its profits. Something that characterizes us is the honesty to speak up about the needs of Colombians. We know that consumers have identified with our communication style and the evidence of this is the more than 6.5 million views that the 'Clavostar' commercial, with a 93% positive feeling in the digital conversation. From Wom we are committed to making visible the bad practices that users with re association to its mobile telephone services and this has been the sole objective of 'Clavostar", said the company.

Merger with Avantel. Although officials ensured that they would continue to exist independently, the merger process will now reach the Superintendency of Companies. For now, Avantel will operate independently until the merger is final. Once this step is completed, Avantel customers will move on to Wom.

Regarding the payment of Avantel's debts, from Tigo officials assure that they expect them to cancel the debt with them, in excess of US$ 12 million, in June of this year. It owes Movistar US$ 10 million and Claro US$ 15 million. But there is no news on the dates of these disbursements.

For the meantime, due to the merger with Avantel, Wom could lose the status of an entrant, since resolution 6127 of the CRC (Communications Regulation Commission) established a differentiation between an established operator and another entrant, a condition that could be lost when merging with Avantel. One of the benefits of being an incoming operator is the payment of lower RAN (National Automatic Roaming) rates, 45% less. But if the traffic comes from Avantel, the inbound status disappears and the merger will have to pay the fees without any benefit.

According to the CRC, Wom must implement traffic control and separation mechanisms, in the event of a technological integration with Avantel. The identification of the origin of the voice or data traffic is essential because for Avantel the remuneration regime for access to the RAN installation with a discount is not applicable. If Wom decides to connect its MME (entity that manages the access of the terminals) with the base stations of the Avantel access network, the CRC ordered that it must inform in writing its decision no less than three months before the estimated start for the course of traffic.

 

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