Billions to Bust – And Beyond

"Mobile telecoms was a sector I knew well, having grown Play, my start-up in Poland, into a top-four independent challenger brand, and although Chile was on the other side of the Atlantic, it did bear some similarities to Play’s Polish homeland. Both were Catholic cultures with a high degree of conservatism. Another element they had in common was their domination by international behemoths. While Play in Poland was up against France’s Orange, Deutsche Telekom’s T-Mobile and Polkomtel, whose Plus brand was 24 per cent owned by Britain’s Vodafone, Nextel Chile had to contend with Entel, the former nationalised Chilean telecoms company whose 127-metre Torre Entel literally towers over central Santiago. Entel controlled about 30 per cent of the Chilean mobile telecoms market. Then there were Movistar, owned by Spanish giant Telefonica, which held a market share of around 28 per cent, and Claro, part of the America Movil telecoms giant, famously fronted by Mexican billionaire Carlos Slim, which had 23 per cent. Nextel Chile had possessed about 2 per cent of the market as a total underdog, and even that was falling steadily. However, we had grown Play from nothing into the leading mobile telecoms company in Poland with a 27 per cent market share, and we saw a similar potential growth trajectory for this Chilean minnow. The financial elements of a deal had to be put together very quickly. We completed the whole transaction in about two months and it was only later that we learned how close Nextel Chile had actually been to bankruptcy wipe-out. We refinanced the company with $400 million of equity and $420 million of debt and set about finding a way to rebrand and reposition it as a vibrant independent challenger brand – a far cry from its previous image as a distant South American offshoot of a major US carrier."

"We are all on the same gravy train though and I remember being acutely aware of that from the start. For ten years, I decided, life was going to be hard work, but then I was going to be extremely rich and have a life of luxury. I would live overseas, own my own plane and buy a yacht. I lived out that dream but it lost its appeal. When I spend more than a few days on a yacht, I quickly become bored. There’s great truth in the old saying in the yacht world that a boat owner has only two pure moments of happiness from it: on the day he buys the boat, and the day he sells it. The plane was great. I could go anywhere I wanted, but most of the time it took me to the next business meeting. Sitting on a yacht and lying on a beach are not really for me. I don’t see how a person with the ambition and drive to get there can ever switch off. I think of my brother-in-law, an artist who just grabs his guitar and writes a song when he feels like it. It’s all about doing what you want to do. I have always been a serial dealmaker, but it is not so easy to plan your next deal when the credit markets freeze and the heady tap of leverage is suddenly turned off."