Chile

"We made our first foray in 2019 when we acquired a majority stake in the bankrupt Colombian telecoms company Avantel, merged it with a vehicle that we had used to buy Colombian mobile telecoms spectrum, and renamed the whole operation WOM Colombia. We then set about investing in infrastructure projects in Colombia over the next five years. Following a bandwidth auction, we won 20 MHz in the 700 MHz spectrum and 30 MHz in the 2,500 MHz spectrum. We then invested in building WOM Colombia’s network, installing more than 8,000 antennae and 3,000 additional towers, and created 2,500 direct and more than 5,000 indirect jobs, with an average age of 32 for recruits. We were probably Colombia’s largest recruiter, opening 147 stores in one year alone. Altogether, we have invested $1 billion of equity in WOM Colombia. We betted heavily that the strategy that had worked so well in Chile would resonate with customers in the much larger Colombian market. It often surprises Europeans that Colombia is the second largest market in South America, after Brazil but before Argentina and Peru, with an official population of more than 57 million, plus what is reported to be more than 5 million Venezuelans."

"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."

"To accomplish all this requires a brand to be worth talking about and recommending to family and friends, so WOM was styled with a rebellious, edgy culture that was not afraid to court controversy and wanted to be talked about. We wanted to have a genuine social impact and to resonate with the issues of the day in order to engage with customers. One of the ways we did that was to acknowledge and address the stark inequalities in Chile and highlight social impact. At the time of our launch, one of the hottest issues in the country centred on various allegations of commercial collusion to the disadvantage of customers. One such allegation involved the forestry and woodpulp industries, with claims that they were artificially inflating the price of toilet rolls, so we filmed an advert featuring someone stealing toilet rolls. Other ads targeted unrest over politics and food. One of our most successful campaigns was based around a popular Argentinian song that proclaimed: ‘You have power but you will lose it,’ to footage of a scandal alleging collusion in the Chilean fishing industry. Another focused on the empowerment of women. We wanted to expose corruption, inequalities and bad practices."

"A few years later, the Covid-19 pandemic affected our business much worse than we realised at the time, with the effects taking years to trickle down into the business performance and total investment costs. It was basically a knock-out blow, and both businesses required a total financial reboot to get back on their feet again. At the beginning of 2024, I exited both of my Latin American telecoms investments after being impacted by enormous headwinds. In Chile I secured a full exit at a substantial profit by not taking part in new equity injection by bondholders there. In Colombia I sold my majority holding for a large loss as part of a [Chapter 11](private://read/01kdksn7jhqrm0f2m3d6xxdngv/ch11.xhtml#ch11) capital restructuring. Nevertheless I regard both as successful examples of adventure capitalism in a continent that was entirely new to me. The investments did not end how I had planned, but I learned from the Icelandic crisis and this time decided to draw a line under them rather than wait for the situation to improve as I had done in Iceland. I had learned to recognise a crisis, and ending my involvement was the right thing to do."