TBY talks to Saúl Kattan Cohen, CEO of ETB, on the complexities of launching a new mobile telephone company, and the growing role of broadband in the Colombian market.

How would you assess the growth of ETB over the past few years?

Last year was a very important one for ETB due to the implementation of our strategic development plan, which sets out the basis of our development for the next five years. In terms of the company's turnover, 2013 was also a key year. We reversed the trend of the past seven years and, for the first time in this period, experienced positive growth.

What brought about the sale of ETB's Tigo shares?

ETB has changed its vision and we sold the shares we had at Tigo. However, before that, we carried out many business activities together. For example, we jointly bought the 4G spectrum for $100 million, sharing the cost of the move, and also share the 4G infrastructure. Tigo is a national company with a high level of know-how and robust infrastructure across the country, and ETB has benefited from that. However, our relationship entered a kind of passive stage and, after doing great things together with the 4G, it stopped generating synergies for ETB's interests. In this context, we are set to launch our new mobile telephony company in September 2013—ETB mobile.

“We are set to launch our new mobile telephony company in September 2013—ETB mobile."

What is the relevance of LTE technologies such as 4G for ETB' s future growth plans?

It is one of our top priorities, because with this infrastructure we will be able to offer services to other providers in the industry. In this context, it also offers us the possibility to expand our product portfolio with something we did not have before. From September, we will be offering voice and data services to both pre-paid and post-paid mobile telephone users at the national level, which will allow us to enter one of the most attractive markets for new technologies.

ETB holds a 34% share in the broadband market, being one of the leading companies in the industry. What is the secret behind this success?

ETB has 129 years of history and has always been a highly innovative company—we have been evolving ever since our first day, and the best example of our success in such a competitive industry is that we are one of the leading companies in Colombia. Also, around the world, there are very few companies in our industry that can boast such a history. In this context, we were the first company to launch broadband services in Colombia, where Bogotá is our stronghold, the area in which we focus our operations, and in which we offer high-quality services. We should keep in mind the importance of Bogotá for Colombia; it represents 25% of GDP. As part of our strategic plan for the next five years, we are pushing innovation and investment to the forefront and plan to replace all our lines in Bogotá with fiber-optic infrastructure. At the moment, more than 200,000 households in Bogotá already enjoy it. By the end of the year, we will have covered between 800,000 and 1 million households. In terms of new technologies and connectivity, our plans regarding fiber optics confirm our commitment to innovation in daily business activity. Again, we are pioneers in being the first company to implement a fiber-optic strategy for households in Colombia on such a level. We also believe that by boosting connectivity with fiber optics across the city, we are also contributing to increased competitiveness, employment, and dynamism in Bogotá. We also will be complementing our services and products with our new TV platform.

How important is service integration for clients?

When we launch our new mobile telephony services in September, we will become the only company in Colombia offering all the integrated services of fixed and mobile telephony, internet, and TV under one brand and with one bill, bringing further convenience to our clients.

ETB recently sold overseas bonds for a total of $300 million. How would you assess the attractiveness of the company for foreign investors?

We are an attractive company to invest in because we have a structured and ambitious strategic plan that sets our future vision as well as the goals we want to achieve and how we will go about achieving them. The issuance of bonds was a great success, and despite having the legal capacity to sell up to $600 million, we decided to target $300 million because the restructuring of the company has created internal synergies as well as raising the capacity of our funding. Thanks to the $300 million deal, we have already covered investments for the next decade and that's the only debt we have currently. The issuance of bonds has shown the trust and reliability investors have in our strategic plan and the growth capacity of ETB.

What have been some of the landmark achievements of ETB during your tenure?

We have received awards both nationally and internationally, which I believe boosts our already established credentials. However, the greatest accolade we have received is the current condition of our company; whereas two years ago it was up for sale and virtually at its end, today we proudly observe its solid development. This is a company that pioneers technologies and we see a bright future ahead of us.

© The Business Year - May 2014