Jorge Estévez

How was the fiber optics industry impacted by the current market context?

Companies are investing to roll out networks to bring internet services to end consumers. Izzi Telecom changed its technology from copper to fiber, so now it is rolling out FTTH services. Totalplay is another company that has taken many steps forward to bring fiber optics to the consumers. We have seen in the fiber-optics business an increase in the demand. In 2011, we incorporated ourselves as a company that does not plan to do the same as other companies do. Our goal was to analyze customers’ needs because they are more than the installation of a fiber-optic network or the maintenance of the facility. We want to bring to the client all the services that exist in the market, so that they can focus on their businesses. We can take care of all the services related to the infrastructure. Our company carries out the engineering services, the design, we request the government licenses, we build the infrastructure, we procure the materials, and we procure the fiber-optics services, among others. We also own a company that manufactures some of the devices that are required within the fiber-optics facility. We bought a small industrial plant, that originally was an iron smelter, and we transformed it into a plant to manufacture these devices. We know the market extremely well.

What are some of the advantages of fiber optics in terms of revenue generation, and how profitable is this investment?

If you develop a fiber-optic facility for a residential development, you might be able to amortize it within the first two years. So, the economic profitability of the investment is up to 40% per year. There are some maintenance costs, but selling the internet is an excellent business. You invest, and then within two years you recover your investment, so all the following years are highly profitable. We have a business unit that installs fiber-optic facilities in mid-sized cities. These are cities where there are not too many competitors. If we go 200km away from Mexico City, there are densely populated locations where there are no fiber optics providers. All the large companies in Mexico are focused on the big cities. Meanwhile, the mid-sized cities with about 500,000 inhabitants do not have many competitors. Part of the intentions of the current government is to bring internet services to remote locations, but it has not succeeded in that goal.

What are your main goals?

We will grow domestically and internationally. In Mexico, we will grow 2.5% by the rest of this year, and we plan to grow in 2022 as well. We are initiating operations with Telmex, América Móvil, which will invest in fiber optics. We will have up to 500 employees for Telmex’s projects and will be an important partner for Telmex. And the same goes for Izzy, Totalplay, and Megacable. All of them are planning to serve the same markets. We are already finalizing talks to close a contract with Izzy and will create 350 new job positions for Izzi Telecom. We currently have 600 employees, and we will have 1,200 employees by the end of the year and 1,600 by March 2021. We are one of the few operators that has its our own TV streaming platform, which is called Kuali Digital. We are the first Mexican company with this service. Kuali Digital is one of our subsidiaries and is already operating in two locations: Hidalgo and Chetumal. Kuali Digital offers internet and television services. We are partnering with a French company called MX Fiber, an investment fund that is buying infrastructure in Mexico. It is developing a network in the southern part of the country to service a part of Oaxaca, Chiapas, Quintana Roo, and the city of Villahermosa.