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Key Achievements 9M08 ……..……..…………………………………….

VIT Shareholder Meeting New York City – October 23, 2008. Key Achievements 9M08 ……..……..……………………………………. Initiatives & Challenges for 4 th Qtr 2008.………...……...................... Business Units Report …………...………………………………….……. Page 2 Page 11 Page 15. Key Achievements. Pág. 2.

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Key Achievements 9M08 ……..……..…………………………………….

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  1. VIT Shareholder MeetingNew York City – October 23, 2008 Key Achievements 9M08 ……..……..……………………………………. Initiatives & Challenges for 4th Qtr 2008.………...……...................... Business Units Report …………...………………………………….…… Page 2 Page 11 Page 15

  2. Key Achievements Pág. 2

  3. Key Achievements Whole Company – YTD08 Results Expressed in Millions of US$ EBITDA 34% better than 2007 • Revenues closed at $ 62M, 39% more than last year and 2% less than budget. • EBITDA was $ 11.5M, 19% of revenues, 34% better than 2007 and $ 585K less than budget. • Residential BU had revenues of $ 44.6M, 37% more than 2007 and 7.5% better than budget. • Corporate BU closed with revenues of $10.8M, 4% better than 2007 and 6% more than budget. • Advertising BU posted revenues of $ 2.2M, 22% better than 2007 and 19% more than budget. • NUI BU had revenues of $4.4M, 54% below budget due to technical platform delays. Pág. 3

  4. Key Achievements Residential Business Unit • YTD EBITDA 8.1% better than Budget and 59% above equivalent period of 2007. • 96% collection completely aligned with budget, despite difficulties with SENIAT regulations and the monthly billing process. We have not physically invoiced subs during the whole year. • 30% YTD relative EBITDA . • Deployment of DOCSIS 2.0 in Guatire to deliver Broad Band and Voice services over one single CPE. • Popular areas in Guatire 100% operative under our franchisees model. • Implementation of BOSS (1) in 4 cities (Caracas, Guatire, Maracay and Barquisimeto). • With the adoption of this new system, we decide to count subs on a 30 days base, hence producing a healthier portfolio. • Sport Plus channel introduced in Puerto Cabello, Mérida and San Cristóbal. Corporate Business Unit • YTD EBITDA 16% better than budget. • 5 points less in cumulative erosion as % of revenue vs 2007. • 58% growth in average monthly installations vs 2007. • Historical record on September sales since 2004. • First “JumboLAN” (100Mb Metrolan) sold to BANESCO. • All time telephony sales record with 385 new lines during 3Q. (1) BOSS: Business Operating Support System Pág. 4

  5. Key Achievements NetUno International • 40+ services launched last month, and record activation of calling cards in Florida at a clip of 4,200 / day. • Interconnection negotiations with more than 10 international providers. • Wholesale termination over NGT network started 45 days sooner than expected. • SIP Proxy installation in Portugal. • Implementation of “Rate Management Tool” application to control rates. • Price adjustments in La Propia calling cards. • Expansion to 120 channels of GW in Caracas, and migration of LD Telecom’s DID’s to NEXTONE. • New access numbers for prepaid LDXpress in Venezuela. • Connection of new ISP - Cogent in MDV. (Waiting for traffic migration). Regulatory & Legal Affairs • Plan C put in place consisting in deployment of “Vonage-like” telephony services throughout the required cities. • Visit to Colombian regulatory head as part of NUI expansion, and support of licenses and IX contracts. • A. Scharffenorth appointed as speaker at ministerial Caribbean Telecom Union meeting on October 08. • Development and execution of regulatory strategy for NGT- NetUno fusion Pág. 5

  6. Key Achievements Human Resources • Launched new program of Performance Evaluation. • We started to apply tests to candidates to evaluate attitudinal profiles. Information and Technology • Implementation of BOSS in 4 cities according to schedule: Caracas, Guarenas, Maracay, Barquisimeto. Internal Communications & Events • Celebration of the NETUNO day: Celebration for the 13th year birthday. • Family Sunday: Employees shared a Sunday with the NETUNO and family. 76% nationwide attendance. • Delivery of monthly bulletin “Conéctate a tu Empresa”, 8,500 + issues nationwide. • Tour 41: Gilbert talks face to face with employees: nearly 100% attendance. • Celebration of 2nd sport tournament with a 60% attendance. • Delivery of more than 635 birthday letters to all our employees across the nation. Corporate Social Responsibility • NetUno is starting a structured program to support the community offering integrated Internet service and PC’s to low income area schools. This year we gave the service in one school in Guatire, our goal is to bring Internet and PC’s at least in one school in every city every year. Pág. 6

  7. NGTV – NETUNO network integration. 1.- SDH_Microwave Backbone Caracas - Maracaibo. 2.- Telephony VoIP & TDM. 3.- IP & PDH access networks. DOCSIS 2.0 and PacketCable 1.0 deployed in Guatire to impulse voice services over HFC. BW Manager and HTTP Proxies installed in every city which offers internet broadband, reducing BW consumption by 22% without affecting BB service performance. DUMS version 3 (Provisioning server): Development of a new software to keep billing control on new voice subscribers without human intervention in every part of the provisioning process. Increase of MetroEthernet coverage in Caracas and Valencia by migrating voice and data traffic from SDH Networks, releasing capacity. Digital Video HeadEnd solutions on analysis phase. Adjustments on Fiber Optical Network to deploy MetroEthernet Ring Expansion in Caracas and Valencia. MPLS Platform successfully upgraded. Increase of internet backbone capacity with a new 45 Mbps link and a 10 Mbps link for VoIP traffic. Activation of BGP as new routing protocol enabled by Core Routers upgrade. Key Achievements Engineering & Operations Pág. 7

  8. Key Achievements Finance • VIT’s restructuring totally completed. • First payment to J. Rey funded at Bs.F.3.3/$ and ready to be made on Nov 7. Parallel XR Bs.F. 5.2/$. • $ 750K drawn down from BANCO DEL CARIBE’s $1.5M pre-approved revolving credit to cover WC and CAPEX needs on strategic projects of NETUNO. • New credit lines with mayor Venezuelan banks have been activated without problems. • Almost 100% of the CAPEX executed YTD bought through CADIVI at the official XR Bs.F. 2.15/$. • We were one of the first companies to obtain a certification from government to import capital goods. • BSG and affiliates have purchased for us equipment with markups up to 25%. • Completed the acquisition of CNH/NGTV. Merge and integration processes on plan. Planning • Completed the revision of our Vision, Mission and Values with the participation of 75 executive members. • This will help enter this new era of growth with more momentum and an expanded ownership base. A formal communication plan is underway. • Planning and budgeting processes are running, and are estimated to be completed by mid November. • Request of approval from the Board will be made by late November or early December. • A team of four members of NETUNO went with a team of Merrill Lynch and other advisors to analyze the USVI opportunity. • Outlook for 2008 is indicating for $ 90M in Revenues and $ 18M in EBITDA. Pág. 8

  9. Key Achievements CNH / NGTV Acquisition Overview • On August 25 we completed a three month due diligence process to buy CNH-NGTV shares, a company which owns licenses to provide National Data Transport, Wireless Access, Private Networks, Domestic & International Long Distance and Internet. • The most important contributions of this acquisition are: • 1.- A substantial increase of interconnection capacity to complete national and international calls. • 2.- Independent interurban transport capacity via microwave from Caracas to Maracaibo, which reduces dependency from CANTV. • 3.- Substantial increase of TDM E-1’s to connect new end corporate customers on an ANS Ericsson voice switch identical to ours. • 4.- Avoid a very expensive and disruptive node move. • 5.- For the first time allows us to offer wireless services, which among other benefits allows us to install customers much quicker and in places we cannot reach with fiber. • 6.- A very attractive payback period and very comfortable payment terms. In addition it avoids a competitor from entering this space. • 7.- Avoids a $3 million income tax cash payment in March 09. • We expect to increase our transport capacities by a factor of 7, in a project that will begin in 2009 and completed in 2011. Pág. 9

  10. Activity Start Date End Date Gateway Installation AS5350 to enable VoIP interconnection between NetUno & 23/09/2008 24/09/2008 NGT in El Rosal IP assignation to activate VoIP traffic 25/09/2008 25/09/2008 Connection to NGT's ANS to the first 5 E1s 25/09/2008 25/09/2008 of GW AS5350 Dispatch of Wholesale traffic from Nextone 25/09/2008 26/09/2008 to 5 E1s connected Expansion from 5 to 8 E1s between GW 08/10/2008 08/10/2008 AS5250 and El Rosal's ANS Release of a second GW AS5400 to 13/10/2008 15/10/2008 connect 4 additional E1s VoIP traffic migration from a converter to a new ESU, increasing IX reliability 19/10/2008 19/10/2008 Key Achievements CNH/NGTV Acquisition. Advantages and Progress Report. • STM1 CCS - MBO used only up to 60% • 23 E1 available for transportation backup from Caracas to extreme Western Venezuela. • 50% participation of voice services to be delivered in a 6,000 home residential complex in Barquisimeto. • Wireless data delivery network on open frequencies and proprietary technology by MOTOROLA CANOPY • Independent interurban transport capacity via microwave from CCS to MBO. • Tax Loss Carry Forwards avoid our disbursing an Income tax payment next March, currently estimated at $3 million at the official exchange rate Pág. 10

  11. Initiatives in Progress Pág. 11

  12. Initiatives in Progress Residential Business Unit • 30K two way homes passed conversion project by 1st Qtr next year on time. • Development of new CATV networks in low income zones in Barquisimeto with commercial allies. • Negotiations to bring our services in a new residential zone El Encantado (over 45K HP) • Head End digitalization in Valencia & Maracay scheduled for end of year. • Preparation of recently acquired NGT network to bring BB and Telephony services in Barquisimeto. • Be very attentive to the launch and progress of Movistar’s new DTH offering. Corporate Business Unit • Banco de Venezuela internet mega contract to be installed in November • New SDH 155Mb layer being evaluated to meet legacy carriers needs. • Certification and merge of NGT infrastructure into corporate capacity inventory, including strategy for wireless “beachheads”. • Execute savings produced by NGT transport capacity incorporation. • Pursue of exclusive telecom services agreement for new bus and metro “Estación Central” hub in Plaza Venezuela which includes 250 stores Pág. 12

  13. Initiatives in Progress NETUNO International • Everything ready to launch pre-paid LDXpress and Pin Frees simultaneously in Venezuela and the USA. • Close the acquisition of ECONOTEL in November 2008, and cover it under NetUno branding as of 1st Qtr 2009. • Preparing web sites to launch operations in the USA and Portugal on a first phase. Colombia and Panama will be introduced on a second phase. • Monitor NETUNO International operations from the NOC in Venezuela. • Improve the costing, LCR (least cost routing) and routing of Wholesale with NEXTONE. • Discussion in Portugal to interconnect with PT. • Negotiations with ETB and TIGO have been advanced in Colombia, as well as with C&W in Panama. • Evaluation of BOSS in Colombia to improve the billing process. Pág. 13

  14. Initiatives in Progress Information and Technology • Implementation of BOSS in the rest of the cities according to schedule. • More than 170 PCs & laptops replaced in all cities. Engineering & Operations • Development of Digital Video HeadEnd to support premium channels. • AC and DC Power Systems Upgrade. • Softswitch Platform Software Upgrade. • 5 new POIs to be opened with Telefónica Movistar to have nationwide interconnection. • Development of new Multiservice Access Platform capable to handle ADSL2+, VDSL and VoIP POTS. • Geographic Information System on final evaluation phase. This system will allow to manage a database of every passive device that NetUno has installed nationwide. • Design of Gigabit Passive Optical Network as an alternative solutions to transmit Video (Analog, Digital or IPTV), Voice and Data either Residential or Enterprise Market instead of HFC Networks. Finance & Planning • Auditing process for year 2008 starting by mid November. • New communicational plan to be executed by Vice-presidents simultaneously in the nation in early 2009. • We expect to profit from the tax shield produced by the CNH/NGTV acquisition. • We plan to back new credit lines with banks using land acquired from the recent NGTV transaction. Pág. 14

  15. Business Units Report Pág. 15

  16. Residential Business Unit Pág. 16

  17. Residential Business Unit P&L Comparison – 9M08 *expressed in US$M EBITDA 59% over 2007 and 17% better than budget • Revenues closed at $44.6M, 37% more than last year and 7,5% better than budget. • EBITDA was $13.5M, 30% of revenues, 59% more than 2007 and 17% better than budget. Pág. 17

  18. Residential Business Unit EBITDA / COGS / SG&A Ratios – 9M08 *expressed in % • EBITDA ratio has improved versus Budget and last year. • Even though G&A ratio have decreased one point, our COGS ratio improved five points. Pág. 18

  19. Residential Business Unit Revenues Distribution – 9M08 *expressed in US$M Collection / Revenue Ratio 9M08 *expressed in US$M • Total Revenues increased 37% more compared to 2007 and 7.5% to budget. • CATV remains the most important business unit, 39% above last year and 9% better than budget. • Collections have improved closing at $42.6M, 33.4% above last year and 7.1% better than budget. • Collection ratio presented a slight drop of 1 point as presubscription line collections are being included and affect the traditional ratio. Pág. 19

  20. Residential Business Unit Subscribers • Basic subs decreased 0.8% compared to December 2007, and closed 4.7% below budget. CATV Penetration remains flat. • Broadband subs grew 14% compared to last year, though 11% below budget. • Telephony subs still below our expectations. Pág. 20

  21. Residential Business Unit Franchisees *expressed in US$K Cablenorte Petare Revenues Cablenorte Sarria Revenues • Franchisees revenues have been increasing steadily, surpassing our expectations. • Petare YTD Revenues increased 79% compared to 9M07, and Sarria over 719% Pág. 21

  22. Residential Business Unit Franchisees *expressed in US$K and units Cablenorte El Valle Revenues Subscribers • Subscribers indicators have also improving 22% in Petare and 157% in El Valle, compared to 9M07. • We started new operations in El Valle, reporting excellent results. • Franchisee subscribers are not included in our total sub-count. Pág. 22

  23. Residential Business Unit Hard Churn ARPU *monthly average • Hard Churn had a slip of less than 1%, as a result of efforts to have a healthier client portfolio. • ARPUs have increased in all the lines of services except for a slight slip in Telephony compared to last year. • CATV and Internet grew 33.7% and 8% compared to 9M07. Pág. 23

  24. Corporate Business Unit Pág. 24

  25. Corporate Business Unit P&L Comparison - 9M08 *expressed in US$M EBITDA 16% better than budget • Even though wholesale services were transferred from Corporate Business Unit to NetUno International Unit, revenues closed at $10.8M, 3.9% better than 2007 and 6.4% more than budget. • EBITDA ended at $2.5 M, 26.4% more than last year and 16.3% better than budget. Pág. 25

  26. Corporate Business Unit Revenues Distribution - 9M08 *expressed in US$M • Data Revenues grew 24%, Corporate Telephony 5%, Internet 1.3% and Canales 347% versus 2007. • Versus budget, Internet and Telephony revenues were slightly lower due to delays in platform installation caused by CADIVI delays in authorizing equipment importations. Pág. 26

  27. Corporate Business Unit Sales Goals – 9M08 *expressed in US$K Sales per Sector Sales per Services • Accomplishments per Sector: Large: 122%, Carrier: 95%, PYME: 102% • Accomplishments per Services: Data: 124%, Internet: 142%, Voice: 75% • Voice below expectations due to low unit sales compared to budget. Pág. 27

  28. Corporate Business Unit Services Review – 9M08 Number of services ARPU Review – 9M08 Expressed in US$ • Corporate BU services had an total growth of 9.7% compared to last year 9M and a slight drop versus budget due to Telephony units. • Versus 2007, Data Services grew 8.4%, Internet 13.4% and Telephony 8.6%. • Compared to last year, Data ARPU grew 10.8%, Internet 16.3% • Versus budget, Data ARPU grew 21.2%. Internet 39.1% • Telephony ARPU is below expectations. Pág. 28

  29. Corporate Business Unit ARPUs Performance - 2008 *expressed in US$ • Even though the currency exchange hasn’t changed, Corporate ARPUs have increased all along the year due to a better mix of services and application of less discounts. Pág. 29

  30. Corporate Business Unit Churn - 9M08 *expressed in US$ K Collection - 9M08 *expressed in $US M • Churn increased 6% compared to budget, due to telephony desertions but Churn/Sales Ratio has improved from 24.6% to 19.7% • Corporate collections increased $632 K compared to 9M07. Pág. 30

  31. Corporate Business Unit Pending - 9M08 Monthly Average Installations *expressed in $US K • Installations grew 58% compared to last year with a monthly average of $42 K. • Pending installations also grew in a 70% compared to 9M07, with a monthly average of $157 K. • The main reason of pending installations was related to buildings in the process of being activated. Pág. 31

  32. MCM & NUI Pág. 32

  33. MCM Business Unit P&L Comparison – 9M08 *expressed in US$M EBITDA 50% better than budget • Revenues closed at $ 2.2M, 22% above last year and 19% above budget. • EBITDA surpassed expectations closing at $1.0M, 50% above budget. Pág. 33

  34. NUI Results Financial Results – 9M08

  35. NetUno International Revenues Details – 9M08

  36. La Propia Sales Calling Card La Propia USA Sales at October 15th, 2008 ** Sales after commissions Pág. 36

  37. Price Adjustments La Propia Calling Card • Prices were adjusted on September in order to be more profitable in Central American destinations, a new adjustment is scheduled to be effective on November 1st. Pág. 37

  38. Marketing La Propia Rate Card El Venezolano Newspaper

  39. La Propia Calling Card Activations 18 States • La Propia Calling Card has been used all over 18 States in USA.

  40. Initiatives in Progress NUI Telephony Matrix Products Pág. 40

  41. Engineering & Operations Pág. 41

  42. NGT_NETUNO Backbone Network

  43. NGT_NETUNO PDH Access Network

  44. DTX LA DTX CCS 5xT1 1xE1 CPA CANTV R2 1xE1 (1024Kbps) FE0 216.72.89.243/28 Router ImageStream SS7 4xE1 Global Crossing 3xE1 PRI AS5302 0/8 FE0 216.72.89.247/28 SS7 1xE1 0/1 0/23 FE0 216.72.89.245/28 1xE1 PRI S0 - 206.49.193.238/30 0/22 0/16 SW2 S1 - 206.49.193.42/30 AS5304 0/4 FE0 216.72.89.241/28 0/21 R2 2xE1 0/2 0/1 R2 2xE1 8xE1 PRI SW1 SW3 AS5400 CPA CANTV FE0 172.17.32.11/24 FE0 64.241.169.150/29 FE0 216.72.89.242/28 2xE1 PRI 2xE1 Meridian CCS 2xE1 PRI 2xE1 AS5306 AS5301 AS5305 NxE1 2xE1 PRI S0 - 206.49.193.236/30 S1 – 206.49.193.40/30 SIP Server Asterisk ngtvmaq1 SIP Server Asterisk ngtvmaq2 LDN VOICE NETWORK (CANTV MOVISTART MOVILNET DIGITEL DIGICEL NETUNO INFONET) 2xE1 PRI 208.50.70.29/28 Ericsson ANS TL 208.50.70.20/28 SIP Server Asterisk LIG Services NGTV CANTV DDS AT&T CANTV DDE Equant Internet Access Verizon VoIP/Data Network Mera Softswitch SSP NGT_NETUNO Voice & VoIP Network

  45. NGT-NETUNO Backbone Network • EL Morro (Valencia): PDH access networks. • Irapa (Gran Caracas): Backbone networks (equipments & Tower

  46. AC POWER System Upgrades • Mobile generator in order to supply outage electrical power • Replacement of electrical cable supply

  47. New trucks • New 11 trucks to our vehicles fleet.

  48. Support Units Pág. 48

  49. Barquisimeto Support Units, IT WAN: Current Capacities Maracay Maracaibo Guarenas Cisco 7206 Cisco 7206 Cisco 1720 512Kbps Cisco 1750 Valencia San Cristobal 256Kbps 512Kbps Cisco 7206 128Kbps 1024Kbps Cisco 1750 La Candelaria 512Kbps Mérida Cisco 805 256Kbps Cisco 1720 256Kbps 512Kbps Cisco 2610 Cisco 1005 Plaza las Américas FW Juniper NS50 256Kbps Catalyst 4006 Cisco 805 Internet El Paraíso Internet/ VPN La Urbina La Candelaria

  50. Barquisimeto Support Units, IT WAN: 4th QTR Projected Capacities Maracay Maracaibo Guarenas Cisco 7206 Cisco 7206 Cisco 1720 1024Kbps Cisco 1750 Valencia San Cristóbal 1024Kbps 512Kbps Cisco 7206 1024Kbps 1024Kbps Cisco 1750 La Candelaria 1024Kbps Mérida Cisco 805 256Kbps Cisco 1720 256Kbps 1024Kbps Cisco 2610 Cisco 1005 Plaza las Américas FW Juniper NS50 256Kbps Catalyst 4006 Cisco 805 Internet El Paraíso Internet/ VPN La Urbina La Candelaria Data Link to be upgraded

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