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MX23_IT_MEGACABLE_Raymundo

MEXICO - Telecoms & IT

Raymundo Fernández Pendones

Deputy CEO, Megacable

Bio

With a 30-year track record in the telecommunications industry, Raymundo Fernández Pendones serves as Deputy CEO of Megacable. He is currently vice president of digital strategy of CANIETI and chairman of the board of GTAC. In addition, he has been a member of the board of directors of TEPAL, the COPARMEX, the National Chamber of the Cable Television Industry, Productora y Comercializadora de Televisión, S.A. de C.V., and the Association of the Mexican Cable Industry. He is also a founding member of the Mexican Cellular Telephony Association (AMCEL). He holds an MBA from Gonzaga University of Washington State, an MBA from Gonzaga University, and specialties in telecommunications, finance and marketing from ITESM, and banking and credit from ITAM.

"As a result of ongoing network improvements, we are doubling the speed available to subscribers in the cities where we operate."
Megacable has invested significantly in infrastructure and expanding to become a major player in fiber and entertainment.
What are the primary development prospects within the Mexican telecommunications industry?

The company is focused on two markets: the mass market, where we are known as Megacable; and the corporate market, in which we have business units such as MCM, MetroCarrier, ho1a Innovación, and PCTV. Close to one-fifth of our total consolidated revenues comes from the corporate market, and the rest from the residential, and within this business model we draw three axes on which we base our vision of the company in the future and how we are going to get there. Regarding the first initiative, we anticipated an in-crease in bandwidth demand and took on the task of accelerating investment projects to strengthen our network capacity. The next project is related to how we have to evolve in order to remain an important player in the entertainment market, since younger generations are more focused on streaming or watching a video in a non-linear way, where you choose the video you want to see on different platforms and by niches. The answer to that is our product called Xview+, a multiplatform video service that integrates all of the market’s apps or streaming services, based on Android TV and providing the subscriber with a user-friendly interface and a search option. In addition, we also include 150 linear HD channels for the market that wants to see linear TV; our subscribers will be able to navigate between streaming, convention-al, and non-linear content in the same platform. There has been a great acceptance in the market for this product, already reaching over 80 million non-linear video reproductions. Moreover, it gives Megacable a long-term vision of how to maintain and penetrate a market that is deaccelerating in other geographies. For example, there is a lot of noise in the US about cord cutting, which means dropping the paid TV service of a bundle and maintaining only the internet service. There is still a strong possibility to maintain the service through integrated apps, streaming, voice remote control, and the Android TV search engine. Our third initiative is related to: Where do we see ourselves in the future? We want to be a company with a national presence with a very efficient operation. We have a project, called MEGA 2025, through which we will double the size of the company in the next five years, including the mass and corporate segments. This implies deploying 50,000km of fiber and, instead of having 9 million homes passed, we will reach 18.5 million. That would put us in the position of being a national player. This vision includes growing the corporate business, including MetroCarrier and ho1a’s units. The goal of these investments in the MEGA 2025 initiative is to be-come a major fiber player, conclude the construction of the network in a period of three years, and double the size of the company in five.

What strategy is Megacable using to double its subscriber base?

As a result of ongoing network improvements, we are doubling the speed available to subscribers in the cities where we operate. For all of our legacy subscribers, we offer interactive video services. The company’s current objective is to have the vast majority of subscribers using an Android TV within the next three years. However, doubling that size will depend on a larger scale on the mass market and the company as a whole, including organic growth. It will likely require an increase in the number of employees from 24,500 to over 40,000. We are opening 88 cities simultaneously, and building fiber and roads to the border and the rest of the country. We are confident enough to invest USD2 billion over the coming years, averaging USD500 million per year. The strategy is to build and operate efficiently, since we know how to do it, maintain a tight cost structure, a great video and broadband product, and commitment to customer satisfaction.

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