Latin American Economy & Business - December 2016 (ISSN 1741-7430)

Region: Corporate Radar

Televisa linked to FIFA investigation: Televisa, the Mexican media conglomerate controlled by the Azcárraga family, could be involved in the ongoing scandal affecting FIFA, the international football federation. US prosecutors have claimed that an unnamed affiliate of a major broadcasting company headquartered in Latin America helped to pay millions of dollars in bribes to obtain the rights to broadcast the next four World Cup tournaments in Argentina, Paraguay and Uruguay. The Reuters news agency said it had been able to identify the affiliate as Mountrigi Management Group Ltd, a Swiss company controlled by Televisa. It said that Swiss company registrations indicated that Mountrigi Management and Televisa shared the same addresses and some board members. “We are certain that all of the people from Mountrigi or Televisa that have dealt with FIFA have acted correctly and have not paid any bribes nor any kickback to FIFA official related to the acquisition of rights,” a Televisa spokesman was quoted as saying.

Google in Cuba deal: Google, the US-based internet and technology company, has signed an agreement with Etecsa, Cuba’s state-owned telecommunications company, to provide faster data access on the island. The deal involves installing local servers that will hold much of Google’s content, reducing the need for signals to travel back and forth via Venezuela and from there to the US. Because of the half-century old trade embargo imposed by the US on Cuba, there are few direct data links. While the deal is seeing as improving internet speeds, it will not necessarily remove other obstacles to connectivity, such as the limited number of home connections or the high cost of access to public Wi-Fi (10 hours of Wi-Fi access can cost the equivalent of one month’s average salary). According to a statement from Google: “This deal allows Etecsa to use our technology to reduce latency by caching some of our most popular high bandwidth content like YouTube videos at a local level.”

Vale opens giant mine: Vale, the Brazilian mining group, has opened its S11D iron ore mine (also known as Serra Sul) in the Amazon state of Pará. The mine, representing total investment of US$14.3bn, is expected to produce 75m tonnes or iron ore per annum when output ramps up over the next four years, making Vale the world’s largest iron ore producer, ahead of Rio Tinto of Australia. The Brazilian company has persisted with the project despite the global fall in iron ore prices, which slumped from US$191/tonne in 2011 to US$37/tonne in January 2016 (although they have subsequently climbed back to US$79). S11D is expected to provide some of the best quality iron ore, at the lowest production cost, anywhere in the world.

Colombia goes Rappi: Rappi, a Colombian start-up company, is attracting attention as a new Internet and web-based delivery service. Initially set up in northern Bogotá under the name Grability in 2013 by three Colombian entrepreneurs, it took five months to build up a meal delivery service to 200,000 customers. The founders then changed the business model and renamed the company Rappi, raising around US$9m through Y Combinator, the California based accelerator. Rappi’s basic proposition is to use local messengers to carry out a wide range of tasks for customers – including everything from shopping through to the delivery of take away meals, documents or payments. One of the founders, Simón Borrero, says, “We live in cities like Bogotá and Mexico City with transport problems which complicate and consume peoples’ lives. Rappi identifies the needs of people who live in these complicated environments and presents solutions based on consumption and shopping trends”. Deliveries are carried out by self-employed individuals who set their own hours of work (similar to the Uber model). Known as rappitenderos, they now number approximately 2,000 and can be seen wearing bright orange uniforms. They must have an Android phone and a bike or motorbike. Rappitenderos can earn up to COP2m (US$600) a month. In one year, the company’s total staff has jumped from 10 to 600. The service is currently available in Bogotá, Medellín, Cali, Pereira and Barranquilla in Colombia. In Mexico, it is on offer in Mexico City, and is set to start soon in Guadalajara.

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