BlackBerry’s Helping Hand: Canada Gives Telefonica A $256M Capital Facility For BB Devices And Services
Today, Export Development Canada, the Canadian export credit agency, announced that it has provided a €200 million ($256 million) working capital facility to Telefonica, one of the world’s biggest mobile operators, to procure BlackBerry smartphones, services and solutions for its global footprint, which covers 315.7 million subscribers across 24 countries.
While BlackBerry is pushing very hard for a turnaround with the launch of BB10 and a raft of new devices, it still needs to do a lot of legwork to convince carriers that they should be making the extra investment to stock its devices. Figures out earlier this week from Kantar Worldpanel Comtech noted that RIM’s share of handset sales in once-key markets like the U.S. had dwindled to just 0.7% of sales in the 12 weeks to the end of February, down from an already very sad 3.6% a year ago.
Gartner today published numbers that project that BlackBerry will only account for 1.3% of global smartphone shipments in 2013, with that proportion only getting smaller in the years ahead.
This injection of capital for one of the world’s biggest carriers ensures that Telefonica will be making the investment to get those phones out to the market. It’s a particularly important deal for BlackBerry because Telefonica has a large footprint in emerging markets in Latin America.
This is one area where BlackBerry has continued to see some interest in its devices, and it’s also still one of fastest-growing regions for smartphone adoption, at a time when more mature markets have already become more saturated, slower growing and “won” by Android-based handset makers and Apple.
It also happens that one of Telefonica’s key partners for new services in Latin America, Bango, is the billing partner for BlackBerry in its app store — meaning that it’s in Telefonica’s interest to get more Bango-enabled handsets out into the market to help it succeed in its own efforts to get users charging content to their phone bills (and making more revenue for Telefonica in the process).
A recent order for 1 million BB10 handsets, reportedly by Brightstar, also underscores this trend of focusing on newer markets. Brightstar has a strong global footprint for helping to distribute mobile devices.
Today’s news is also a sign of how carriers, worried about taking risks on devices that are not guaranteed, sure-fire hits, may no longer be willing to gamble as they have done before on procuring handsets that are long-shots.
“EDC’s financing is really about making the transactions between BlackBerry and Telefónica easier, helping to enhance and broaden the relationship between these two major global players,” said Lewis Megaw, Regional Vice President Africa Europe and the Middle East, EDC, in a statement.
This is not the first time that the EDC has worked with Telefonica. It has been providing financing since 2006 “in support of its various Canadian procurement needs.” Those would have presumably also included deals with the likes of Nortel, the now-defunct Canadian telecoms vendor. Update: And, to be fair, it’s worth pointing out, as a commenter points out below, that it’s fairly routine for export credit agences in different countries to provide facilities to buyers to pay for goods to export and sell elsewhere.
OTTAWA, April 4, 2013 /CNW/ – Export Development Canada (EDC) today announced that it has provided a €200M working capital facility to Telefónica to facilitate the procurement of BlackBerry® smartphones, services and solutions across its worldwide operations.
Telefónica is one of the largest global telecommunications companies, with operations in 24 countries and a customer base of over 315.7 million subscribers. EDC’s working capital facility will facilitate BlackBerry market share growth within Telefónica.
“EDC’s financing is really about making the transactions between BlackBerry and Telefónica easier, helping to enhance and broaden the relationship between these two major global players,” said Lewis Megaw , Regional Vice President Africa Europe and the Middle East, EDC.
EDC has provided financing to Telefónica since 2006 in support of its various Canadian procurement needs.
Two-way trade between Canada and Spain reached CAD 2.6 billion in 2012, primarily in the ICT, Aerospace and Extractive sectors. Of that, over 500 Canadian companies used EDC’s services to undertake more than CAD 414.8 million in trade with Spain in 2012.
In 2012, over 1,000 Canadian exporters and investors in the ICT sector used EDC products and services to facilitate more than CAD 8.4 billion in international business.
EDC is Canada’s export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC’s knowledge and partnerships are used by more than 7,400 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis.