Spain’s Tuenti: from social network to MVNO

Tuenti, sometimes called Spain’s answer to Facebook, is to continue shutting down its social network — a process begun in 2012 — and will increasingly focus on being a mobile virtual network operator (MVNO) as part of a strategy designed by its owner, Telefónica, according to Spanish media reports.

When Telefónica bought Tuenti in 2010, it was obvious it had no interest in developing the social network but was only interested in the company’s estimated 10 million users as potential customers.

But Telefónica’s strategy has proved problematic. The attempts to leverage Tuenti as a social network, driven by the pressure from Facebook, dodged a key question: Tuenti users were not loyal to Tuenti, but to what Tuenti meant to them: a platform where they could hang out with friends and acquaintances.

This confusion between the platform and its activity is common among companies that run social networks: Friendster could do nothing to prevent its expansion in southeast Asia, and ended up being sold to a Malaysian company; a similar process took place in Brazil and India with Orkut, which ended up more or less abandoning users in other areas of the world. And over the last six years, Telefónica has seen how once Tuenti ceased to be seen as relevant, its users didn’t automatically see it as their MVNO of choice, and the company has had to tough it out in the marketplace like any other cloud-based telephone services provider. People are not sheep and do not obediently stay with brands if that brand is no longer offering the service they want.

As a social network, Tuenti had a bigger impact than is often acknowledged. Aside from resisting Facebook’s expansion better than other social networks around the world managed, it lived up to its expectations as a place that few adults had any idea about, as its slogan promised: “What happens on Tuenti stays on Tuenti.”

The idea of keeping the network closed and non-indexable appealed to many young people, and as we have seen since, is increasingly becoming the norm: young people no longer talk on Facebook, even if they still use it: instead, they talk on WhatsApp, Instagram, Snapchat, and other similar applications. As a social network, Tuenti had its limitations, but played a key role for a certain generation for a while. Of course as that generation grew older and moved from school to university, it moved on to other things.

Tuenti isn’t a bad MVNO, but the company was never properly integrated into Telefónica, and none of the promised synergies materialized. For most young people in Spain, Tuenti is just another MVNO in a crowded field. It wouldn’t be hard to market it as something different, and it looks like that is Telefónica’s plan, but as a glance at the company’s corporate website shows, for the moment, Tuenti is focused on the virtual mobile market.

Evolving from social network to MVNO also means attracting and retaining a very different kind of talent. At one point, Tuenti was a real talent hub, but that talent moved on when it became clear, after Telefónica took over, that all was required were people able to manage an MVNO. Seen from this perspective, all Telefónica has done in the end is destroy the very value that it initially saw in Tuenti. The question now is whether it can recover that value.

It might be possible via a strategy that really gives sense to the idea of a MVNO, and that would make young people think that their smartphone can open the door to the world. But that would mean Telefónica understanding that Tuenti’s products need to be good enough to lose it customers in some segments; that Tuenti was able to offer something different. If trying to implement such a strategy means a permanent struggle, tensions and internal conflict with Telefónica’s structure, then Tuenti would clearly be getting things right. Would Telefónica allow this? I seriously doubt it.

(En español, aquí)