Q&A with UFINET CEO, Iñigo García del Cerro Prieto
20 March 2020 | Sponsored Statement
Capacity speaks with Iñigo García del Cerro Prieto, Chief Executive Officer (CEO), UFINET, about some of their recent challenges and opportunities, and his forecast for the industry going forward.
Q. We know that UFINET has had many opportunities during 2019. What have these been?
The progress of the demand for services is supported on the transport network (capacity and locations). One of the focuses of our company has been to reinforce both of our platforms at DWDM and carrier ethernet level. Alternatively, we have kept the maintenance, implementation and study of new solutions that help us improve our efficiency, productivity, flexibility and security such as CDN's, SD-WAN, SDN, DDOS Protection, among others.
UFINET continues the track of success that it has undertaken with a worldwide and massive presence through Latin America and becoming the benchmark as a global Infrastructure Operator. The organization keeps increasing the offer of telecommunications services and creating neutral environments that translate into better and more reasonable services for the overall population.
UFINET’s primary vision is to become the neutral telecom infrastructure carrier of reference worldwide, and the company has been working towards the goal much more intensely in last three years. The firm has meaningfully increased its internationalization through add-on acquisitions and organic growth with a significant global investment in fibre optics that has surpassed the $200 million mark.
Below are some of the main opportunities for the last and next months.
UFINET has a clear vision that optical fibre will reach nearly every home in Latin America as in the rest of the world. From our preceding experience, we comprehend the need of a neutral fibre network that may help and speed the deployment of such expensive solution. 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 Latam 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. Our company 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.
The expansion of 5G goes beyond speed and bandwidth. The challenge is being able to improve the latency issues to deliver 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 optical fibre. UFINET will play a key protagonist in these deployments, especially in small cells, where the high capillarity of our fibre network is vital to assure a massive and fast implementation of connected tower solution. Today we are already placing many thousands of poles in the marketplace 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 extremely well positioned to address this challenge, not only because of our dense fibre network, but also the agreements already executed with third parties to use their infrastructure to provide immediate towering solutions to our customers.
UFINET has been able to deliver a higher quality in customer experience. When we talk about effectiveness, UFINET get things done, it’s as simple as saying to our client what we will do, how and when, and of course 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 accomplished when it needs to. On the other hand, giving feedback at any time to our clients on where we are standing sends them the message that we are always working for them.
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 provide great new opportunities for growth.
Connection between Colombia and Panamá
This new connection between countries will allow the use of multi-wire fibre optic cables, as well as the illumination with our robust DWDM equipment.
UFINET has received various prestigious awards:
- MEF Award – Best Wholesale Service Provider of the Year CALA, 2017 and Service Provider of the Year CALA, 2018 and 2019.
- Carrier Community Global Award – Best LATAM Regional Operator of the Year, 2018 and Best “Connecting the Unconnected” Operator, 2019
- Frost & Sullivan – Best Practices Award: Latin American Fibre Optic Wholesale Network Services Company of the Year, 2018 and 2019.
- CV Magazine – Corporate Excellence Awards: Multinational Telecommunications Company of the Year, 2018
- The Technology Era – Most Admired Companies to Watch, 2019
- Carriers World Awards – Most Innovative Wholesaler, 2019 and Best Regional Carrier, 2019.
- Global Carrier Awards – CEO of the Year, 2019
- World Communication Awards – CEO of the Year, 2019
- Glotel Awards – Connecting the Unconnected, 2019
Q. You must have had many challenges to capitalise on those opportunities. Could you tell us more about that?
UFINET’s regional growth was has always been our vision. Having both a large backbone and a dense network with lots of coverage allows us to reach more customers. The main challenges of this expansion have been through both in organic and inorganic development, and both have been key to reach our goals.
Some of the most important challenges we have had to overcome are:
Local markets: we are present in almost every country in Latin America, and each of them is totally diverse, such as learning how to operate in each territory, local market behaviour, laws, governments, economy and local currency, just to mention a few.
Regionalization: We have been able to consolidate all dissimilar marketplaces thanks to our amazing network, with which we can reach places that no other operator can. However, one of the main challenges to overcome is to keep installing the network in places where we see are so many opportunities for evolution.
- Development of Brazil’s network, both in backbone and capillarity in the main cities of this big territory.
- Interconnections between countries, such as Ecuador with Perú, as well as developing a strong backbone and capillarity network, 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 visualized that operators not only needed the fibre 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.
Q. Do you have a focus on any new interesting areas for development and new opportunities?
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 forecasts where the collaboration between different players is going to be of paramount importance. Just for 5G and FTTH every operator will need billions of dollars for new investments while facing new business models like streaming or facing stiff competition in contents or risk of new players like we are already seeing in some countries. It is our belief that the traditional fully integrated operator is something that will not prevail in the future, where new models are being developed.
We´re very passionate about these new business and partnership models. We are seeing a foundation of a new pattern 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 dialogs and are doing projects with customers that we couldn´t have imagined just a few years ago. In this sense, we are giving the opportunity to many clients to contend in FTTH segment in areas where they didn’t have any presence up till then, which is always good for market.
Q. What forecasts do you have for the industry over the next 3 years?
For UFINET, our focus for the next 1 – 3 years is to continue the path of success that we have commenced with a global and massive presence throughout Latin America, becoming the benchmark as a global Infrastructure Operator. Our ambition is to continue to increase the offer of telecom services for data and Internet transportation and creating neutral environments that facilitate healthy competition among carriers, and that translate into better and more reasonable services for the general population.
We foresee that the following months and years 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 new set of infrastructures and UFINET will be there to support our clients.
We see that the Latam region presents many chances for growth for players such as UFINET, which aim to increase sustained expansion, providing greater accessibility of data traffic and reaching populations that still have little coverage. The bandwidth requirement of users increases 50% every year, which signifies an invaluable opportunity for progress. In 2016 there were only 3.5 million households connected to the fibre optic network, while in 2017, according to the Fibre Broadband Association report, this increased to 5 million homes. This symbolizes 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.