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Juan Carlos Archila Cabal

COLOMBIA - Telecoms & IT

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President, Claro


Juan Carlos Archila Cabal obtained a Master’s of International Business Studies from the University of South Carolina in 1994. He went on to become the Director and General Manager of Motorola de Mexico S.A. in 2002. In 2004, he was appointed Vice-President of the same company. In March 2007, he assumed the position of President of Brightstar Corporation Latin America in Mexico. Archila has been President of Claro for América Móvil in Colombia since 2009.

"Colombia in general has been slow in implementing new technologies, but once it starts, it happens very quickly."

What have been Claro’s milestones over the 2012-2013 period?

We have been working toward the integration of systems and networks, both fixed and mobile, in order to be able to move forward into convergence services. This requires some time, but we will see that come to fruition soon. The other milestone for us is 4G. After a lot of discussion regarding Claro’s participation in the 4G auction, the issue was resolved and we became one of the main players in the ICT arena, offering 4G services to our customers. These are the two emblematic elements in terms of innovation within the ICT industry at the present time.

What is unique about Colombian customers?

Colombia in general has been slow in implementing new technologies, but once it starts, it happens very quickly. With the mobile market, innovation started in 1994, five or six years later than the average Latin American country, but it still reached 100% penetration very quickly, probably faster than other markets in the region. Another good example is represented by computer usage; a lot of different companies are looking at Colombia as a growing market at this point in time because it is taking off really fast, and this does not regard computers only, but pretty much any other service. In addition, I consider Colombian consumers to be very price sensitive. For example, mobile rates are probably the lowest in the region and perhaps in the world. The average price per minute rate in Colombia is probably about $0.06, while Claro’s is probably about $0.045. Colombians talk a lot, almost twice as much as other Latin Americans. For example, Colombians talk about 210 minutes a month, while an Argentinean is closer to 130 minutes per month.

“Colombia in general has been slow in implementing new technologies, but once it starts, it happens very quickly.”

How is the competition in the sector in Colombia?

If you focus on the sector, today you have four more companies that are providing mobile services, so there is competition, as well as different Mobile Virtual Network Operator (MVNO) options for consumers. The churn rate—the switch rate from one provider to another—stands as one of the best indicators of competition. Colombia has the highest churn rate in the world: about 4%. With no competition, this figure would be very different.

What are the current issues in the sector, especially regarding the lack of infrastructure?

There is no lack of investment. Clearly, there have been commitments from all the companies, and especially from Claro. There are indicators that prove that to be the case; for example, the coverage of 3G today is probably one of the highest in the world. Around 95% of the municipalities have access to 3G. Given the fact that each municipality defines its own regulations regarding the deployment of infrastructure, permits take forever to be issued, which creates delays and slows our ability to deploy infrastructure. We cannot go as fast as we would like to keep up with the ability to invest. Also, the electricity issues, especially in rural areas, can be regarded as something else holding us back from moving forward.

What was the role of Claro in terms of broadband improvement?

Claro has two big fronts: keeping the share of the market that we have from the mobile side, and, at the same time, growing very quickly in 3G coverage. One of our biggest challenges is to be able to provide speedy broadband at all times. Since this is shared infrastructure, the quality of service varies depending on different times of the day. Regardless, the major chunk of the growth is still coming from the mobile side, and that is our driver. From the landline side, we have grown a lot in broadband, even to the point where today we are close to being the leader among the five major broadband providers in Colombia.

Can you talk about Claro’s Wi-Fi hotspots?

We are growing our Wi-Fi coverage with the idea of being able to complement the two networks, to funnel traffic from the wireless side into the wired side, and to use that capacity throughout the country. Given the restrictions we have on the deployment of infrastructure, this task is something that is not under our control in terms of managing traffic from the two networks.

What improvements will the submarine cable, AMX-1, bring to Colombia and Latin America?

We have a certain amount of data capacity in the country overall. The AMX-1 will multiply that capacity by 50 times, which will enable us to manage the internal network and the local country network. We will then have the company’s networks, both wired and wireless, meshed together, and be able to funnel traffic through either of those channels. Today, due to continuous innovation, the network is really becoming one. On top of that, we are adding the fiber optics project, which will add coverage to different parts of the country and bring significantly higher speeds in terms of data transmission, allowing us better connectivity with the rest of the world. For the future competitiveness of the country, we hope for faster infrastructure deployment. It is becoming evident this is something we are missing in order to take advantage of our free trade agreements (FTAs).

What does cloud computing represent in terms of strategic management and IT services for the companies?

It allows companies to bring technology closer to home, allowing businesses to be more competitive. Furthermore, it represents the adoption of technology from the mass market. We will see people being able to use the memory capacity to store files remotely, and it will hopefully bring down the cost of broadband and computing because you will not have to own that memory locally in order to use it. That is part of the evolution of shared software, which is something we are doing with partners like Microsoft.

Which areas of the IT sector have more potential for growth?

Broadband, as well as data services, continue to be our drivers for growth—fronts on which we are working really hard. Today, for example, we have 250 municipalities covered with cable. About 80% of that is already bi-directional, which allows you to provide not only TV services, but all the other services as well. It is clear that huge investments will be necessary, provided that we can resolve the instability that we are seeing today. I believe the cloud will be the engine because I think companies will very quickly start offloading all the things that actually bring down companies—things that are outside of their core business.

What is your outlook for the ICT sector in Colombia for 2014, and for the role of Claro in it?

For the ICT sector, it is clearly a year for investment and 4G will be the key driver of that with many companies testing different business models. In keeping with our present business model of offering mobility to Colombians, Claro’s future plans will be no different from the past. We are reinvesting about 70% of our profits year after year and Claro is a large corporation compared to the size of the country, so the amount of investment is remarkable. The other area of focus will be the customer service area, where we are working on improving and having much better indicators in terms of customer satisfaction. We want to make sure people get the answers and have the services they are looking for. This is a challenge, but we are investing in a lot of new points of sale, customer service centers, call centers, and in all the different channels to become better on that front.

© The Business Year – November 2013



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