Diana Daniels
History will be kind to me for I intend to write it
W. Churchill

In Telecom We Trust

December 2013

The best way to find out if you can trust somebody is to trust them. That is what Ernest Hemingway said, although I’m sure he did not work in the Telecom Industry, ever.

How many companies that rise and fall due so as a lack or excess of trust?  The general assumption is that success grows out of good relationships, while poor cooperation and lack of trust might lead to disaster. Although there are still examples where high-trust environments failed and those of turbulent ones might succeed. I can tell, for my own experience, that I see trust in two sides.  External (out of the company) and Internal (inside of the company).  While the External trust is built upon the work and reputation of its executives, and it has to do with the values that those executive had shown and carried along their carriers. The internal one is built through the top management and ownership of the companies towards their executives and general employees.

Executives in search of business making and deal closing have to believe in their projects and of course in their companies (management, owners), otherwise most likely they wouldn’t be able to close any businesses. And when companies’ fail to deliver trust to their management team, chaos succumbs. I personally can tell that all the trust I used to have in the owner of the company I worked for more than 6 years (which I left two years and two months ago), fell too late. I was blinded trying to believe that all was good and of course it wasn’t.

A year and two months has passed after the falling of Vivaro, former Epana and STI, today reborn in the new Angel Americas. And what had happened? Nothing much. The other day a couple of calls, rang into my phone. Industry members trying to look for help in making sense of the left pieces. Also received desperate calls from some the top creditors trying to activate The Hunt of the Owner of Marcatel, in an attempt to recuperate any or some of their lost values… Many losses there, employees lost an approximated 800 thousand dollars in compensations, severances and/or expenses that most likely wont ever get paid. Tax, communications and government agencies said to be owed close to 38 million dollars; distributors and printers claimed to loose more than 5 million dollars; technology vendors lost around 2 million dollars; and in the sector with major impact, the carriers’ losses accounted for something in the neighborhood of 55 million dollars.

Out of those 55 million, the Mexican concessionaries were left with an unpaid bill of 2.5 million dollars, (60% of it belonged to the Mexican Incumbent, Telmex, who seems to be getting used to Marcatel not paying their bills in Mexico). During the process of negotiations in between the abrupt, although expected exit of Next, it seemed Sprint reached a deal and wave the 6 million dollar claim they had at the beginning of the year. After that, the US-CLECs bill went for an approximated of 4 to 5 million dollars (being Level 3 Global-Crossing with the biggest ticket). Another 6 million dollars bucket went to 4 of the major PTTs in Europe, South America and two of the largest Caribbean communication carriers. The other 30 million in the bucket it is so polarized that just to remember it, is too painful to continue. Even the owners of Marcatel claimed an additional 20 million dollars that supposed was owed by their own American venture and failure.

After Nextcomm exit the Venture of the former Vivaro assets, Angel Telecom increased their participation up to 75% and also did Marcatel with the 25% left over. Although the company has a new head, market analyst said it seems the old ways in management continue. "The same loosing cards, the loss in the value of the brands, the bad marketing and poorly developed sales, continue to be the same after these two years". It is like if really nothing had been learned, connoisseurs commented.

The hope to get anything back to the creditors is vanishing as the snow is melting in the North Pole. Just like the polar bears are in agony, the creditors are sharing the same feelings, looking at their chances to recover anything to disappear. The worst case is that it seems like the owner has started a witch-hunt against the carriers that tried to offset their debt at the time, while sending traffic in return to Mexico, which by the way was paid at an expensive rate, trying to mitigate the loss. In return of such threat, some of the big telecom operators has started digging for ways to connect the former Vivaro entity to Marcatel in Mexico, to see if there is any way they can collect by having access to the assets of the Mexican concessionaire. Little they know that the Mexican operator might be in deeper trouble already, and hanging by the weakest links under the lagoons of the Mexican telecommunications laws.  It seems the company has pledged everything up to the teeth to the largest Mexican incumbent for all the years of non-payment and compromises not reached.  So analyst might say “Good luck in getting paid in Mexico, if the richest men in the world has not been able to make them pay, who will?” While I do not encourage the effort of the Mexican incumbent to play against the rules of competition in Mexico, I definitely agree, that no one can be over the justice, no one should be able to hide under the flag of being a small competitor trying to “survive” the power of the richest men, in order to deceive others. We shall encourage fair play, but all across the borders.

After the fall of Vivaro, many, many companies blamed them for not paying bills, and used it as a reason of their bad debts to other carriers, generating a big snowball that fell under many others. Interesting would be to see which ones, took advantage of the turmoil  noise and just make an excuse of it. Just like in the case of EMS, the Escrow company, one of those falls due to excess of trust. An interesting read the book Blind Trust with Open Eyes, it is revealing how friendship and trust can be deceived in the name of greedy. A fast, clever and well-informed report on what happened during those days.

Indeed Trust is a scarce asset that needs to be developed by anyone in the attempt of building a business, a career, an employment and for sure a relationship. Regardless that life teaches us all that falls are tough, the vision of any leader is tested in how many times they are able to get up again. So I truly hope for those creditors in the line of getting paid, I wish for them to find the way to get back up again, while this new years brings them more prosperity and bigger chances to win in their attempts! And I will have to agree with Hemingway at the end, we cannot allow any one to take away our ability to trust again. If we need to trust any one, yes, the only way, indeed is to trust them!

Happy Holidays everyone… wishing you a Successful and Trustworthy 2014! 

December 2013