While they’re run separately, Wom’s operations in Colombia and Chile share elements of the strategy that’s allowed Novator to disrupt other telecom markets. Namely, showy marketing tactics and cut-rate prices in places where service is expensive and competition is limited.
This isn’t that novel an approach, of course. Smaller operators for years have employed edgy advertising to win market share even in the most developed countries. T-Mobile US Inc. gained a name for itself with outlandish publicity strategies under its leather jacket-wearing former CEO John Legere.
Bannister is of the same vein—with a little of Richard Branson and his thirst for adventure mixed in: He talked about an upcoming hang gliding trip and has biked across South America.
Fit, energetic and sporting a swoop of a gray mustache revealed only when he drops his mask to take a sip of water, Bannister came to Latin America somewhat reluctantly. He intended his last overseas jaunt to be Myanmar, where he bought a bamboo farm with the idea of exporting the harvest to Sweden to build bicycle frames from his houseboat.
Flight Home
Then Bjorgolfsson called with an idea to open a company in Chile. Despite his limited Spanish and little experience in the country, Bannister was convinced after a visit. On the flight home, he sketched out a business plan.
Wom entered in 2015 by buying Nextel’s operations. It grew to 4.9 million customers as of June from the roughly 200,000 customers it inherited, according to government data. Investors have cheered on the company’s wins, sending benchmark bonds from the Chilean unit up 46% last year, the best performer among emerging-market corporate debt after distressed notes from the mobile operator Digicel.
With that track record of success, Wom poses a “clear risk” for incumbents in Colombia, said Arturo Langa, a Mexico City-based analyst for Itau BBA who covers America Movil.
However, with its vast rural areas where Claro is firmly entrenched, the country may prove more similar to Mexico than Chile. In its home country, America Movil has been able to keep its dominant position despite pushes from new players, like AT&T Inc.
For now, as Bannister travels the country opening new offices, he’s seeing that the company’s theatrics are at least gaining it notoriety. A cabby on the Caribbean island of San Andres, 750 miles north of Bogota, recently recognized him from a video of the November launch event, he said.
“The rationale piece is good service at a low price. Then you have the emotional piece, which is about engaging with the population,” Bannister said. “And that’s where the brand comes in.”
This article was provided by Bloomberg News.