News, views and commentary from the telecoms sector across emerging markets and developing countries worldwide

Friday, 15 May 2009

Salty name, sweet subsidies: more on the Venezuelan handset phenomenon

Recently, when I quickly added a short piece here about the low cost handsets launched this month in Venezuela, it seems I left out some interesting details.

The detail that has been grabbing headlines across the UK's mainstream news media is the name given to the device, El Vergatario. Prior to reading these recent stories, I vaguely remembered the name of the phone and even more vaguely recalled reading somewhere that the term meant something like 'the excellent one'. (That's enough vagueness, Ed.*)

So imagine my bemusement at seeing UK newspapers rubbishing the idea that the monicker of this remarkably cheap device is so innocent. Numerous Fleet Street hacks have converged this week on a different understanding of the handset's unusual name, i.e. that it is a freshly coined vulgarism from a Venezuelan city known for its inventive slang. On Monday, the Guardian, to take one example, delighted in presenting President Hugo Chavez as a smirking practitioner of double entendre. "Whoever doesn't have a Vergatario is nothing," said the Venezuelan leader, with the Guardian suggesting that this remark was an off-colour joke.

Word quickly travelled back to Caracas about the Guardian's story. Yesterday the paper was reporting that President Chavez had used a televised speech to rebut the notion that some Venezuelans had been offended by the handset's name:

"In the Guardian they think it's something rude. That is a big mistake. They are ignorant," said Chavez. "He cited the Spanish language reference dictionary, the Real Academia Española, which defined vergatario as an adjective signifying quality and value," reports the UK paper, whose backtracking is slyly qualified by its assertion that "the etymological debate spread to websites today and broke largely along political lines, with Chavez supporters championing the non-vulgar interpretation."

Whatever the case, in the following clip from the President's regular TV show, he does seem to be playing for laughs. My Spanish is far too limited to understand the gags. If anyone wants to post a translation of his words in the comments box, do please go ahead!

All very amusing. Less impactful in terms of making the news, but perhaps of more immediate relevance for readers of this blog (i.e. people working in telecoms in emerging markets) is the question of how Vetelca (the Venezuelan state-ZTE joint venture assembling the phones) is able to put a fully-featured device into the hands of the consumer for just USD15. I daresay the price of the Chinese-made components is not excessive. Good old handset subsidies, however, perhaps play an even more important role in arriving at the low retail price of the phone. As the original Guardian article on the device noted, "a government subsidy which cut the retail price to a quarter of the manufacturing cost is likely to make the Vergatario an immediate hit."

It might therefore be more apt to call El Vergatario a low price handset than to call it a low cost handset.

* apologies to Private Eye

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