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MEXICO - Telecoms & IT

Ray Fletcher

CEO, Fermaca Networks

Bio

Ray Fletcher has been the CEO of Fermaca Infraestructura for five years. He attended the Law School of the National Autonomous University of Mexico (UNAM) and has extensive experience as an entrepreneur, having been a part of the early stages of the fast-food franchise industry in Mexico in the early 1990s and in the hedge fund industry from 1995 to 2017.

"Dark fiber has typically not been the domain of many companies, and we saw an opportunity to participate in a market with great promise."
Fermaca Networks is working to help develop the most advanced cross-border connectivity project between the US and Mexico at present, leveraging its extensive expertise in this area.
How is dark fiber an opportunity for investment in the Mexican telecoms industry?

Dark fiber has typically not been the domain of many companies, and we saw an opportunity top articipate in a market with great promise and few companies willing or able to develop and sell such infrastructure. Considering the experience that Fermaca and its sister company BCYSA Servicios Industriales has in the development of linear projects due to its deployment of 2,200km of gas pipelines, it was just natural that we leverage that expertise through Fermaca Networks. We thus decided to pursue the development of 1,950km of dark fiber with the latest technology and the most advanced fiber available today. We are bringing to market a product that has typically been in short supply in Mexico. Dark fiber availability has been an underserved market, with an oligopoly of a few participants who held those assets close to their chests. It was indeed difficult to find it to purchase. Currently, there are other companies start-ing to develop that type of infrastructure. What makes ours unique is the fact that all of it is under-ground. Another distinct feature for the Fermaca Networks route is that it runs parallel to certain gas pipeline infrastructure as well as federal high-ways, allowing for greater security. When we built the Fermaca gas network from Juarez down to Aguascalientes, San Luis Potosí, and Guadalajara, it represented 7,500 individual real estate trans-actions and took over 20 years to complete. This expertise will allow Fermaca Networks to deploy 1,900km of dark fiber in three years.

What are the main objectives behind the partnership announced between Fermaca Networks and Zayo?

We are excited and pleased to be partnering with Zayo to develop the most advanced cross-border connectivity project between the US and Mexico in the present. Zayo being one of the leading providers in fiber in the US, makes a great partner that will allow both companies to provide a unique service of an integrated interconnection solution between Mexico and the US. The Zayo leadership has recognized Fermaca’s capabilities, and this partnership attests to that. The last project of this magnitude, which is a long-haul dark fiber network, was built in the mid-1990s, and since then there has not been a similar project of this scale. Typically, the fiber optic developed in Mexico in the last 25 years has been more short haul, with most of it aerial. The recent trend of nearshoring and the construction of important data centers in Querétaro demands such fiber infrastructure. Some of the fiber that is part of those projects was built 20 years ago and are coming to the end of its lifespan. In addition, those fibers cannot handle the demands of today’s data consumption. We need the fiber optic to have certain characteristics to handle the traffic. When it comes to investment, the Mexican portion of the network, which is our responsibility, represents a capital investment of USD200 million, and it will be completed in 4Q2025. We have an equity and finance structure that we are in the final stages of putting together. We have a leading bank working to put the financing together as well as equity partners.

How much growth in demand do you foresee for edge data centers versus hyper scale in the coming years?

Right now, it is the right time in Mexico to start looking at some edge facilities rather than concentrating everything on hyper scale. That will bring data closer to users, bring down latency, and ensure data reaches end users more efficiently. We are reducing the cost of our operation to be lower than typical data centers. They are obviously smaller as well. For the design, we have been partnering with a company from the US since 2021 that designs and holds a patent for this technology. This cutting-edge technology has been validated to deliver a greener solution to the typical data center operation. We have decided to negotiate an exclusive agreement for this technology in Mexico that we will announce in 2023.

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