NetUno unfazed by market situation in Venezuela

<a href=www.latintrade.com>NetUno

03/24/2003 - Source: Business News Americas (BNamericas.com) (BNamericas.com) - Venezuelan multiservice provider NetUno expects to double its basic telephony client base and see continued Ebitda growth this year, despite the country's fragile political and economic situation, NetUno marketing VP Alberto Scharffenorth told BNamericas.

The company billed almost US$40mn in 2002 and registered 50% growth in Ebitda, Scharffenorth said, adding that NetUno ended 2002, effectively its first year as a basic telephony provider, with 4,000 residential clients. However, he doubted Ebitda growth for 2003 would be as impressive as last year.

Corporate uptake of basic telephony service was also satisfactory given the difficulties of the last year, he said.

NetUno's networks cover about 500,000 homes in 10 cities in addition to 300 corporate buildings in the Caracas business district, he said, adding the residential network has two-way capability in an area covering just over 40,000 homes.

The company's cable TV business was stable in 2002, with a year-end count of 110,000 subscribers, and Scharffenorth expects marginal growth this year, although Internet access should grow satisfactorily.

Scharffenorth expects 2003 to be a very difficult year, and accordingly NetUno will invest primarily in upgrades of existing infrastructure this year to expand basic telephony coverage.

The key elements that have set the economic climate for 2003 were the two-month general strike earlier this year and unemployment as a result; 120% growth in the exchange rate in the last year, bringing the dollar to 1,600 bolivares; and the indefinite closure of the currency markets on January 3. Looking at the evolving local telephony landscape, Scharffenorth also said he expects mobile operator Telcel BellSouth to effectively join Cantv (NYSE: VNT) as a second basic telephony incumbent as it rolls out its wireless local loop network.

NetUno has six fiber rings in Caracas, plus rings in Valencia, Maracaibo, Barquisimeto, Maracay, San Cristobal, Merida, Puerto Cabello, Guarenas and Guatire. Over the last two years the company has invested in improving the corporate network's quality; rather than expansion, the focus has been on adapting it to the most popular platforms, such as frame relay, ATM and MPLS.

The company's principal shareholders include the Merrill Lynch Global Emerging Fund; Newbridge Vencable Partners - a joint venture between Texas Pacific Group, the Andean Development Corporation (CAF) and the Overseas Private Investment Corporation (OPIC); Wave Transnational; IDS/American Express; and ZB Wired of Grupo Zubillaga.