Megacable 2018


Letter from the Chairman of the Board

Letter from the CEO

Corporate Information


We managed to sustain our pace of growth and demonstrate stability.

Letter from
the CEO

To the Megacable Holdings S.A.B. de C.V.
Ordinary Annual Shareholders’ Meeting

Dear Shareholders and Members of the Board of Directors,

I am very pleased to present you with Megacable’s results for 2018, an important year for both the Company and the country amid challenging circumstances characterized primarily by the uncertainty that surrounded the year’s elections, which delayed both public and private investment decisions.

This period signified for Megacable a consolidation phase. Leveraging our strengths –an innovation focused culture, efficient investment, an experienced management team and values deeply rooted in the organization that provide our Company its unique identity– we managed to sustain our pace of growth and demonstrate stability despite the adversities encountered over the course of the year, thereby allowing us to continue posting positive results.

One highlight of our operating performance was to achieve 8 million revenue generating units (RGUs) during 2018. This marks a significant increase from the previous year, which we accomplished by growing the number of subscribers in all three mass-market segments. As a result, we reached 2.21 RGUs per unique subscriber.

2018 also proved to be a year of solid financial results in which we achieved double-digit growth in a number of key indicators. We met our revenue target with more than Ps. 19.5 billion in sales, a 13% increase compared to the previous year. Consolidated EBITDA totaled Ps. 9.4 billion, also a 13% improvement over 2017.

One of our main competitive advantages at Megacable is the efficiency with which we apply technology and innovation. We are constantly striving to remain at the industry’s forefront and to make our technology a distinctive and authentic hallmark. We are characterized by the best technological development, operated by an unsurpassed team of specialists whose innovation, knowledge, and know-how add great value.

In 2018 we centered our efforts on consolidating our services, expanding capacities and partitioning nodes in order to bolster the technological capacities of our network, which can now handle HFC technology and evolving HFC as well as transitioning to DCCAP and, of course, GPON. Given our experience in efficiently managing these technologies, we achieved continuity in our goal of becoming the market’s best option, offering competitive rates and reliable service that exceed our subscribers’ expectations.


Another strength that allows us to act efficiently is the experience of the Company’s leadership, both within the Board of Directors and our senior management team. Such maturity allows Megacable to be alert to, and prepared for the evolving context arising out of market changes, and translates into decision making agility and diligence, and strategies that guarantee continuous improvement.

We are very proud to report that we continued to achieve solid growth in our various segments during 2018, derived from our high operating efficiency:


The Video segment reached 3,202,184 subscribers by the end of 2018, a net increase of 5% or 162,000 customers compared to 2017. By year’s end, we had digitalized 81% of our subscriber base with 4.9 million set top boxes (STB).

We have consolidated our Xview product, which is present in much of the country and integrates innovative content with a high degree of efficiency. Xview ended the year with 443,000 subscribers, a 273,000 increase for 2018. We remain focused on cutting edge technology and continuous improvement, with the goal of expanding content supply and availability as well as optimizing this interactive platform’s performance while satisfying our subscribers’ needs in light of new trends.

We reached more than 3.2 million Video segment subscribers during 2018, 5% more than a year earlier.


This segment sustained its subscriber growth trend reaching 2,942,403 or 12% more than a year prior. Moreover, with the aim of assuring our adaptation to current trends and the emergence of new ways to consume content, combined with our innovation and modernity focus, we introduced new broadband technologies, maintaining our network at the forefront with capacities to spare for operating at the speeds our subscribers need to enjoy streaming content.

In 2018, we reached more than 2.9 million subscribers in the Internet segment.


In light of the wired telephony market’s marginal pace of growth, we are very proud that Megacable concluded 2018 with 1,812,881 subscribers in this segment, a net 346,000 increase over the course of the year. This result represents a significant 24% rise that is, to a large extent, the result of our successful strategy of bundling value products at competitive prices.

We ended 2018 with more than 1.8 million subscribers in the Telephony segment.

Corporate segment

This segment sustained its growth trend and continued to deliver excellent results with 34% revenue growth compared to the previous year. To a large extent we achieved this on the strength of an outstanding performance by MetroCarrier, which grew sales 64% while ho1a and MCM grew 12% and 15%, respectively, excluding revenues from the ho1a project with the CFE electric power utility from 2017.

These accomplishments derive from expanding MetroCarrier’s product and solutions portfolio, as well as strong progress in constructing metropolitan rings –a strategy we have implemented in Monterrey, Cancun and Mexico City, among other cities– and in which MetroCarrier and ho1a have expanded their presence and created a diversified client base. In addition, growth was also a product of centralizing MetroCarrier and ho1a management so they can present a united effort and in the process capture greater synergies and customer confidence.

The Telecom Corporate segment’s revenues surpassed Ps. 3 billion, a 65% improvement over the previous year.

We reaffirm our commitment to the country, leading us to accelerate our investments in Mexico.

Megacable is known for maintaining a conservative and robust balance sheet, which sustains our financial structure. We know how to take prudent and efficient advantage of the opportunities provided by each of our assets, as evidenced by the low debt with which we concluded the fourth quarter of 2018.

We reaffirm our commitment to the country that leads us to accelerate our investments in Mexico with most going toward expanding our network’s capacity, running more kilometers of cable, updating and building new kilometers of network, and acquiring subscriber terminal equipment with special emphasis on cities such as Monterrey, Cancun, Juarez and Mexico City, where the investments made in metropolitan rings will serve as the basis for growing our corporate segment in these markets.

The Company’s excellent results were reflected in our share price’s market performance as we achieved the second most pronounced stock price increase of any company during the year, consolidating ourselves as a component of the Mexican Stock Market’s blue chip IPC index, and joining the MSCI emerging markets index, confirming the Company’s financial maturity and generating greater exposure to foreign investors.

These strong results are due in large part to the efforts of our talented team. We respond to their unrivaled commitment by establishing strategies with which to promote their development and reinforce the sense of pride in being part of Megacable. So much so that in 2018, we strengthened and thoroughly revised our training plans to assure they have at their disposal the necessary tools through high-level training. We also conducted a detailed analysis of our operating structures and our office of organizational development. Moreover, we focused on our life and career plan, assuring the efficiency in tandem with a proper compensation plan providing our employees with greater benefits in terms of profitability and productivity.

Our Company is characterized by its resilience in light of the challenges we encounter, applying the lessons learned in past years to specific measures that allow us to remain on the path to realizing our vision. That was the case with the cyber-attack directed at Megacable in November 2018, which did not affect our service delivery, but did have a temporary effect on some of our systems that slowed the pace of sales and collections. That contingency prompted us to optimize, correct and strengthen our information security system.

The Company emerged stronger, minimizing the impact and accelerating the resumption of normal operations.

Without a doubt, 2018 was a year characterized by consolidation as we displayed the necessary stability despite a turbulent period. The telecommunications market is increasingly challenging and, Megacable stands out for its proven success in staying one step ahead of the industry. Our goals are centered on consolidating ourselves as the telecommunications industry

Our goals are focused on consolidating ourselves as the leading telecommunications company in Mexico.
We have an accurate outlook, and both the capacities and experience needed to bring it to fruition.

leader, building a reliable network with the greatest user availability and performance. We will work to provide the client the most efficient systems, guaranteeing high quality and meeting their expectations.

We are a Company committed to delivering results and that will remain our strategic orientation for generating value for our shareholders, employees and clients. We will achieve it through a permanent focus on employee development, strengthening procedures, automating processes, and applying cutting edge technologies as well as the network redundancy and availability necessary for assuring our business continuity.

I am deeply grateful to the members of our Board of Directors and Senior Management team, who with their broad knowledge and experience they direct us along a successful path; to our shareholders, suppliers and clients, for the trust they have placed in Megacable; and, of course, I extend these sincere thanks to all our employees, the force powering our Company as much of our positive performance was achieved through their efforts and dedication.


Enrique Yamuni Robles

Chief Executive Officer

Manuel Urquijo Beltrán