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Megacable 2018

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Letter from the Chairman of the Board

Letter from the CEO

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We continue to make solid strides toward our vision of becoming the best telecommunications company.

Letter from the
Chairman of the Board

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

Dear shareholders,

2018 was a year marked by a complicated economic and social environment that resulted mainly from elections in Mexico, and to a lesser extent, the prospects for Nafta renegotiation. However, Mexico proved to be resilient and achieved economic growth compared to the previous year.

Despite this challenging environment, at Megacable we continue to make solid strides toward realizing our vision of becoming the best telecommunications company by offering the best products at the best prices.

The positive results we achieved for the year were made possible by Megacable’s solid strategy, the differentiator that allows us to retain customers and capture new ones, whom often migrate to us from the competition. Through optimum bundling of services for each segment, we effectively confront the permanent challenge of improving our value proposition, making it the most competitive and attractive in the market.

This integrated value offering makes it possible for Megacable to continue to deliver in the Video, Internet and Telephony segments sustained growth surpassing the 2018 industry average.

Megacable stands out for centering our efforts on creating innovative products that keep at the forefront of the industry. A case in point is Xview–a product launched in 2017, but whose value added materialized in 2018– a service whose importance resides in being the interactive platform that adds relevance to our video service, and which allows us to adapt to the latest new trends, habits and customs; in short, to the new ways to watch television.

Similarly, during 2018 we focused our efforts on increasing Internet connection speeds and offering a more reliable service with which to address our customers’ needs and satisfy their expectations. We are totally confident that our value proposition got better not only thanks to competitive pricing, but also due to the range of attractive conditions we are determined to offer our subscribers.

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Moreover, we have achieved our market penetration by communicating our value proposal through both major campaigns directed at diverse generations of users and, of course, the efforts of our more than 19,800 employees.

In line with our innovation focus, we at Megacable maintain a firm commitment to evolve in line with global trends. To that end we have set two important goals for enriching our offering. I am referring, on the one hand, to the launch of a new version of Xview with Android TV™ that will integrate a broad array of television applications in order to expand our customers’ options. On the other hand, we will be working to enhance our Internet service’s speed and stability by expanding its reach, always with the goal of providing the user with the best and total home wireless experience.

As a tenacious Company we navigated a complex industry environment and the cyber attack we were subjected to in November 2018 to achieve solid results with increased growth in revenue generating units, bolstering operating efficiency through lowering costs and expanding into new markets, all the while outpacing the industry. In the process, we allowed for exceptional operating margin and profitability, and positioned ourselves as an increasingly relevant player. All of this was reflected in our share price, which showed the second strongest growth of any stock on the MSE during 2018.

I thank our investors for their invaluable trust; to our Board of Directors and the senior management team for their guidance toward excellence; to our employees and sales force, for their commitment, enthusiasm and dedication in the search for innovation, as well as embodying Megacable values. Today we are the industry leader in the cities where we are present. Thanks for being an essential part of a quest to achieve our vision.

Sincerely,

Francisco Javier R. Bours Castelo

CHAIRMAN OF THE BOARD OF DIRECTORS

Manuel Urquijo Beltrán

SECRETARY OF THE BOARD OF DIRECTORS

Today we are the industry leader in the cities where we are present.