Ufinet eyeing wider expansion plans

11 February 2019 | James Pearce

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James Pearce spoke to Ufinet CEO Iñigo García del Cerro Prieto about the company's plans for 2019

Tell us more about Ufinet?

We have a primary focus in fibre and have a presence all over Latin America, though mainly in Central America and Colombia. Over the past years we’ve been expanding, so we have a strong presence in a number of countries including Mexico, Ecuador, and now we are building a network in Lima, and Santiago in Chile, and we have plans for Brazil and Argentina.

We also have a global network that allows us to provide services anywhere in the world. We can deliver services from Mexico to Miami, and we have over 50,000km of fibre on our network. We provide services to operator entirely in wholesale. Our customers include the likes of Millicom to C&W and we offer everything from Ethernet to fibre and other services

What are your plans for 2019?

We used to have a network in Spain but we sold it off. We also secured a large investment from Italian telco Enet.

Right now we have some rights in several latam cities like Santiago, Lima, Buenos Aires and in Brazil too. Our main focus is on expanding our network in many new countries – that is one of our main goals for the year.

We also want to expand the number of services we provide because we think there will be a convergence of demand from operators. They want to buy fibre, colocation and services. But we think that as mobile coverage becomes more densified in the cities, they are going to have to connect more towers to fibre, so we are also beginning to offer colocation in microcells that are connected with fibre.

What are the big opportunities in the Latin American and Caribbean markets and do you see any challenges there?

If you take Mexico, for example, you have a very complex market. The government has been issuing tenders about both fixed and wireless networks over recent years, which can make entering the market complicated. But there are also huge opportunities there.

It is a very large country and you have huge opportunities there because there is a lack of good connectivity or good quality services in some locations, and that means there is a real opportunity to capture market share.

You’ve recently seen investment from Enel. What does that bring for Ufinet?

It brings additional presence for Ufinet. It is an investor willing to put money into telecoms infrastructure, and building this infrastructure requires a large amount of Capex. So deploying fibre will help us to challenge in the additional markets we’re targeting.  They bring a strong focus in infrastructure and experience in FttH, which we thing will be here in the coming years, along with 5G. This will help us as we look to capture the market.

5G will take some time to be deployed in the region – probably another three years at least. But there is still a big opportunity to continue expanding 4G coverage and offering a higher bandwidth. 5G will not happen in the next couple of years. FTTH will also take a little bit of time. There are some pilots ongoing at the moment and we are looking to be involved where possible, but it takes an enormous amount of capex to deploy FTTH. Even in Europe there have been challenges with deploying FTTH, so it is not something we expect to see in the region immediately.

We want to help our customers to offer the best network services possible, and there are good opportunities for a newer player such as ourselves to deploy a single network infrastructure that can be shared across multiple operators.

What impact are you seeing from the OTT provides on the market, and do you have any interest in the subsea sector?

OTTs have helped to drive the submarine cable industry. They have been involved in the building of several new subsea cable systems – take Brazil for example where there has been a number of new cables. You also have the new cable being built by Google going into Chile (Curie), and this helps to drive connectivity into these countries.

Subsea connectivity is a challenge but once you see that met, the next challenge is to deploy terrestrial connectivity. When you’re paying 10 or 20 dollars per MB in Latin America, it is very difficult to make a business case for 100mb, which will cost you a lot of money. No we’re starting to see that the prices of IP transit is reducing. And then you will see more demand benefitting from that reduction in international connectivity.

We’re not looking at taking capacity on any of the cables because we are essentially a wholesale operator. We do buy some capacity to support our international network – 200G or so for different countries – but that is more to complement our offering for smaller local operators. We are not a big buyer of submarine capacity as that is not really our focus.

What are the benefits of Ufinet’s decision to sell its Spanish unit?

We have the flexibility to focus on one area now – notably in the Americas – where we are growing in many different ways, adding more countries and a bigger footprint. We have lost visibility as to what is going on in one of the most developed markets with Spain, but we have seen in the past because there is somewhere between three to seven years delay between what happens in Spain and what happens in Latin America. The main advantage for us of the sale has been focus. Previously we had some small financial issues operating in two currencies but now we can operate mainly in dollars, which is beneficial for our relationships with our partners in latin America.

What are you looking to get out of Capacity Caribbean

We attend most Capacity events – we were at Metro Connect, we have a delegation at Capacity Caribbean and also one at Capacity Latam.

In the Caribbean, our team will be looking to take advantage of the chance to meet our customers and to find out from them what are their needs, what are they doing, and how we can help them. It helps us map out where we can develop more infrastructure and more plans. As we plan to expand to new countries, there is a chance to find new opportunities and new customers, and to get a read on the market. Whether it be a local event or a distant one, Capacity events give us a chance to find out the needs of other operators.