Wednesday, 08 April 2020

"We are seeing the foundation of a new business model that will change the industry for the future," says Ufinet CEO


Tuesday 17 March 20

The World Communication Awards 2019 'CEO of the Year', Ufinet's Iñigo Garcia del Cerro Prieto, shares his thoughts on winning the award and what challenges and opportunities 2020 holds for Ufinet

What have been the main opportunities for Ufinet this year?   The growth of the demand for services is supported by the transport network (capacity and locations). One of the focuses of UFINET is to strengthen both of our platforms at DWDM and carrier ethernet level. On the other hand, we will keep maintaining the implementation and study of new solutions that help us improve our efficiency, flexibility, and security, such as CDN's, SD-WAN, SDN, and DDOS Protection, among others.   Ufinet continues the path of success that it has undertaken with a global and massive presence throughout Latin America and becoming the benchmark as a global Infrastructure operator. The organisation keeps boosting the offer of telecommunications services and create neutral environments that translate into better and more affordable services for the general population.   UFINET’s primary vision is to become the neutral telecommunications infrastructure operator of reference worldwide, and the organisation is working towards the goal much more intensely in last three years. The company has significantly increased its internationalisation through add-on acquisitions and organic growth with a significant global investment in fiber optics that has surpassed the $200 million mark.   Below are some of the main opportunities for the last and next months:   – The Brazil telecommunication&rsquo…

What have been the main opportunities for Ufinet this year?

 
The growth of the demand for services is supported by the transport network (capacity and locations). One of the focuses of UFINET is to strengthen both of our platforms at DWDM and carrier ethernet level. On the other hand, we will keep maintaining the implementation and study of new solutions that help us improve our efficiency, flexibility, and security, such as CDN's, SD-WAN, SDN, and DDOS Protection, among others.
 
Ufinet continues the path of success that it has undertaken with a global and massive presence throughout Latin America and becoming the benchmark as a global Infrastructure operator. The organisation keeps boosting the offer of telecommunications services and create neutral environments that translate into better and more affordable services for the general population.
 
UFINET’s primary vision is to become the neutral telecommunications infrastructure operator of reference worldwide, and the organisation is working towards the goal much more intensely in last three years. The company has significantly increased its internationalisation through add-on acquisitions and organic growth with a significant global investment in fiber optics that has surpassed the $200 million mark.
 
Below are some of the main opportunities for the last and next months:
 
– The Brazil telecommunication’s market: UFINET entered the Brazilian marketplace in June 2019 by acquiring the company Netell, one of Brazil’s leading backbone network providers based in Sao Paulo, which will definitely provide great new opportunities for growth.
 
– Towering: The development of 5G goes beyond speed and bandwidth. The challenge is being able to improve the latency issues to provide unique browsing experience – 5G deployment is more about fibre than about towers, with a need to have up to 10 times more telecom towers and all of them connected with fibre. UFINET will definitely play a key role in these deployments, especially in small cells, where the high capillarity of our fiber network is crucial to assure a massive and rapid implementation of connected tower solution. Today we are already putting many thousands of poles in the market and many more to come over the next years. New spectrum recently awarded (e.g., in Colombia) and new auctions to be launched shortly will speed up this connected tower demand to cover 5G needs. We are well positioned to address this challenge, not only because of our dense fiber network, but also the agreements already executed with third parties to use their infrastructure to provide immediate towering solutions to our customers.
 
– FTTH: UFINET has a clear vision that fiber will reach almost every home in Latin America as in the rest of the world. From our previous experience, we understand the need of a neutral fibre network that may help and speed the deployment of such expensive solution. It doesn’t make any sense that the telecommunication industry deploys four fibre networks in parallel in some areas and leaves some others without coverage. We have the vision to deploy FTTH networks across Latin America and help our customers to address the BTC market with differentiated and added value services. This is going to be a game-changer for the telecommunication market in Latin America.
 
At this point, most Latin American countries are undergoing significant FTTH initiatives from the main international and national carriers who are seeking new business models and neutral players like Ufinet to reduce CAPEX and OPEX efforts. Ufinet is there to offer neutral FTTH multi-operator networks that allow our customers to reduce risk deployment and make more profitable FTTH services to their end users.
 
– Customer experience: UFINET has been able to provide a higher quality in customer experience. When we talk about effectiveness, UFINET get things done – it’s as simple as saying to our customer what we will do, how and when and complying with it. Making a direct line available up to our VP or our CEO to our customers in case they need to escalate something makes them more reliable to trust us to have all executed when it needs to. On the other hand, giving feedback at any time to our customers on where we are standing sends them the message that we are always working for them.
 
– Connection between Colombia and Panamá: This new connection between countries will allow the use of multi-wire fiber optic cables, as well as the illumination with our robust DWDM equipment.
 
 
What challenges did you face in trying to capitalise on those opportunities?
 
Ufinet's regional growth was has always been our vision. Having both a large backbone network and a dense network with a lot of coverage allows us to reach more clients. The main challenges of this evolution have been focused both in organic and inorganic development, and both have been key to reach our goals.
 
We have had a lot of challenges to overcome, such as:
 
– Local markets: We are present almost in every country in Latin America, and each country is totally different. We must learn how to operate in each territory,as well as local market behaviour, laws, governments, economy and local currency.
 
– Regionalisation: We have been able to consolidate all different markets thanks to our amazing network, with which we can reach places that no other operator can. Nevertheless, one of the main challenges to overcome is to keep deploying the network in places where we see are so many opportunities for growth. These include the development of Brazil’s network, both in backbone and capillarity in the main cities of this big territory, but also interconnections between countries, such as Ecuador with Perú, which have been one of the priorities for development.
 
– Large capital investment: Our project and ambitions require large CAPEX deployments in the short term while its profitability comes on the long term. We have great shareholders that support and fuel our ambitions.
 
– Prices: As every territory matures, prices drop, and clients ask more and more for larger bandwidth with less cost for them. The positive part is that the demand for more bandwidth is very solid and the technology help us improve our efficiency every day.
 
– New services according the market’s evolution: Ufinet was founded as a Dark Fibre operator, which means that we did not provide capacity services (lit fibre) or any other service. Ten years ago, we visualised that operators not only needed the fiber optic cable per-se, but other things as well, such as connectivity (capacity), colocation, internet, and now we see the need for small cells and FTTH and we are already investing in all of them.
 
 
What new areas are particularly interesting to you now – Where do you see the next wave of opportunity?
 
We think that the telecommunication industry is facing many opportunities, but they are going to require huge amounts of CAPEX. 5G and FTTH are some of those opportunities where the collaboration between different players is going to be of paramount importance. Just for 5G and FTTH alone, every operator will need billions of dollars for new investments while facing new business models like streaming or facing stiff competition in contents or the risk of new players like we are already seeing in some countries. In our belief, the traditional fully integrated operator is something that will not prevail in the future – new models must be developed.
 
We´re very passionate about these new business and partnership models. We are seeing the foundation of a new business model that will change the industry for the future years as being an active part of those changes that we are already seeing. We are having conversations and are doing projects with customers that we couldn´t imagine just a few years ago. In this sense, we are giving the opportunity to many customers to compete in FTTH segment in areas where they didn’t have any presence up till then, which is always good for market.
 
 
What did it mean to you personally to win the CEO of the Year award at the WCAs?
 
I’m very thankful to the WCA for the award. It’s has been an immense honour to receive this recognition, especially when it comes from the industry and from our collegues. I see this distinction as an important milestone in my professional carrier, but mainly I see it as recognition to all the exceptional team at UFINET, that for many years have been working alongside with me. I really think that everything that we’ve achieved has been achieved together and that the full UFINET team deserves this award even more than I do. 
 
 
What predictions do you have for the industry over the next 1218 months?
 
For UFINET, our focus for the next 1–3 years is to continue the path of success that we have undertaken with a global and massive presence throughout Latin America, becoming the benchmark as a global Infrastructure operator. Our ambition is to continue to boost the offer of telecommunication services for data and Internet transport and creating neutral environments that facilitate healthy competition among operators, and that translate into better and more affordable services for the general population.
 
We foresee that the following months are going to be very important as the next generations of networks start to plan their roll out in the region. We will start to see some frequency awards, initial FTTH deployments, 4G densification, and 5G planning. All these are going to require a whole set of new infrastructures and UFINET will be there to support our customers.
 
We see that the LatAm region presents many opportunities for growth for players such as UFINET, which aim to increase sustained expansion, providing greater availability of data traffic and reaching populations that still have little coverage. The bandwidth requirement of users increases 50% every year, which represents an invaluable opportunity for growth. In 2016 there were only 3.5 million households connected to the fibre optic network, while in 2017, according to the Fiber Broadband Association report, this increased to 5 million. This symbolises that, in LatAm, where they are still in full development, there is an incredible opportunity for all operators in the region, especially in rural areas, where there is still a lot of effort to deploy to bring communication to as many populations.
 
Ufinet is growing a lot and it is doing it fast. We have opened offices and began operating in 6 countries in the last 3 years: Mexico, Ecuador, Perú, Paraguay, Argentina, Chile, and Brazil. Although we cannot disclose this information right now, we can say that our growth forecast is equally ambitious for the next years.
 
 
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