If we can begin with an overview of the company from its beginnings to its expansions and why?
Convergence Communications is a telecommunications company provider of broadband services in Latin America. It started its operations 4 years ago and it has expanded in three areas in the Latin Region: Venezuela, Central America and Mexico. The focus of Convergence Communications is to serve corporate markets. We are focusing in two countries specifically in Central America, El Salvador and Guatemala. At Convergence, we have grown very fast by the way or means of acquisitions. We acquired companies in Venezuela in 1998 and in El Salvador -Cable Visa- in 1998 which is the largest cable TV operator in Guatemala and is licensed to operate cable TV and other licenses are for data. Convergence converted Cable Visa, the former name of the company, into two telecommunications companies offering all the services available right now within high speed internet, internet dialog, cable TV and data-connectivity. We are at this moment also starting telephone services in El Salvador. We wish to do the same thing in Guatemala: We acquired a company specialized in high speed Internet, called Cybernet. We also acquired a plant to transport the signals. We are building the plant at the moment, we are doing a very large investment in this country in order to convert this company into a truly full Telecom company, taking into account the experience we gained in El Salvador specifically. At the end of 1999, we acquired GBnet which was the telecom division of GBM. GBM operates in several countries in the Region as well as in the Caribbean. It is the exclusive distributor of IBM equipment and offers hardware and software services. The target is the top key accounts in each country including the government. GBM decided they couldn't handle both business telecom and hardware, so they sold the telecom division. Convergence has bought it and GBM has been satisfied with the deal because we have a very complete network linked with most countries of the region as well as the USA. We also acquired the key accounts they had in telecom in the market. So, what we have done so far this year is to reorganize the companies we bought and plan to expand even more next year. In Mexico, we acquired a company at the end of last year called Intervan. It is the second data provider in Mexico after Telmex. Before Intervan, we acquired a participation in Cybernetwork in Mexico City. We also own 50% of a company called Metrocom. We have also an option to go to 7 more cities in Mexico. What we are doing now is to combine the cybernetwork facilities with the data customers we have there. In Venezuela, we acquired a service provider in 1998, the largest one in the region. Then, we expanded the operations to Caracas and we are at this moment adapting the most complete cybernetwork in Caracas. Next year we are going to continue according to our business plan to deploy our network in the three largest cities of Venezuela. We are planning to become a complete telecom business in this country and we are conducting very large investments there.
Why such a large expansion in such a short period of time? What has been the key to such phenomenal growth?
Well the issue is that telecom is a business where if you don't expand and if you don't do it fast, you are dead. You have to really catch up with the competition who is very aggressive. You have to be at the same level of technology and expansion to reach the most costumers possible.
From a regional perspective what kind of position do you have in the market?
We are the only broadband provider company who covers all these countries in the region. We are talking about Venezuela, Costa Rica (restricted cover), Panama, Honduras, Nicaragua, Guatemala, Mexico, USA and American republics.
Once the region is totally surrounded by you, are there any plans to go to further a field?
Not at this moment, the idea is to reorganize for the moment all the acquisitions we made and get more costumers. That is where we are concentrating on right now.
In each of the countries, how difficult is it to enter the market and to gain the necessary costumers from either ex-state owned companies or entering corporations?
I can give you an overview on that because we have had the both worlds here. In Panama, for instance, we started from scratch, it was a very good open market, we applied for our license and got it. Then, we started from zero without any costumer base and built our own network. The competitive advantage that Convergence has over other Telecom firms is that we are still a medium sized company and managed in a fast and efficient manner. We can make decisions really quickly. Many other firms have to get through a lot more bureaucracy in the decision making process. | At present, we have seen many leading foreign players entering the market, all strong brand names. When entering the market , what strategy are you using to develop the market and customer base?
We have a good marketing campaign, well established, offering service at the top of the list. Many big companies cannot provide the type of personal service that we can. We will be launching campaigns all over the region as many of them have new names and we will launch them all under the umbrella name- Convergence Communications.
Looking towards the future, we do our reports every 5 years, what will Convergence Look like in 5 years time when we hope to be able to speak to you again?
We will be the first Telecommunications provider in the region!
Is this going to be a difficult task to achieve?
It is really difficult but we see it happening.
From an image perspective, what kind of image do you think that Convergence Communications has?
A very, very aggressive Telecom provider.
Are you also open to potential alliance or expansion plans?
In this business where development happens so quickly and dynamically, you would be naïve to think that potential expansion plans and future alliances were out of the question.
The market in Guatemala is competitive, why should I as an investor or businessman come to use Convergence Communications as my internet provider or services rather than go to a competitor?
The answer is service. Better service, better speed and quality of that service. Some customers choose to use free providers but we have grown to over 5000 users in a short period of time. This is clearly an example that our service is in demand.
What do you want to see happen to Convergence Communications in each of the countries that you are present in?
In Guatemala, we expect that by the end of the year we will be a complete Telecommunications Company. We will begin 2001 enthusiastically. For El Salvador, we are well positioned at this moment. We have had an alliance with France Telecom and we are going to join our products. We have a product for the residential market, providing high speed Internet, cable TV and France Telecom will be providing the telephone lines.
You are in your 3rd year of business, what have the revenues looked like?
We have had yearly revenue from the first year of 3 million dollars to approximately 50 million dollars revenue now. In 1998 we had about 4000 subscribers. Now, we have over 50,000 subscribers.
What type of effect will the growth of telecommunications have on this region as we see the sector advance?
Communications has made life in the region much better. For tourism it has helped immensely. From a business perspective, it has become a tool that business requires.
What would be your final message to our Forbes Global Billionaires club?
The potential of telecommunications in Guatemala and in the region as a whole is witnessing a huge growth at the moment. Many other sectors are also opening up and providing the region with an ideal platform for investment. I believe that our timing is great to see major developments. |
