Letter from the Board of Directors to the Ordinary General Shareholders’ Meeting of Megacable Holdings
S.A.B. de C.V.
Dear Shareholders,
2013 was characterized by being a year in which major structural reforms were approved, low economic and employment growth, stability in the main economic variables such as inflation and interest rates, and within the sphere of our industry, a major increase in competition. Faced with this situation, we have focused our strategy on improving our service levels, responding to market demands with greater agility, making our operation even more efficient and consolidating our digitalization project in order to introduce new services, which resulted in a growth
both in the number of customers and revenues
The positive results achieved in 2013 in a highly competitive market are the result of our proven business model that focuses on providing the best service, the best content, the best quality and competitive prices.
The approval of the Telecommunications Law
initiative in driven by the Executive Branch
represents a huge step forward for the industry in
terms of openness and competitiveness. For Megacable, this reform translates into more and better opportunities for growth, a more open market and lower interconnection and programming costs for the Must-Carry/Must Offer regulations. All this will translate into a more efficient sector, with greater growth, investment opportunities and a better and broader
offer of services to the population.
This Reform will also provide important opportunities in telephone services, primarily to companies that do not predominate in the market. This change will allow us to offer more cellular telephone competitive rates, so we expect to increase the number of
users. For all these reasons, Megacable is being very attentive in order to capitalize on the opportunities arising from the new telecommunications legislation.
The investment we have made in the national fiber optic network (GTAC) has had a considerable positive impact, because it has generated significant savings in addition
to no longer being dependent on third- party services. Above all, however, it has presented us with a great competitive advantage, because now we have a network with the capacity and high- capacity transmission speed in the regions where we operate to access
the worldwide web.
We continued to strengthen the data, telephony and cable television network, as well as improving service quality through our digitalization project.
The launch of Megacable on Demand has placed us as the first cable company that will offer a multi- screen service to customers in Mexico and one of the first providers that offers this type of service in Latin America, which constitutes a great differentiation in the market.
Moreover, Metrocarrier continues to grow in the corporate market thanks to the fiber optic coverage in industrial parks, which allows us to offer the connection speeds that our customers require.
We are uniquely positioned to capitalize on the growth opportunities that arise from the reforms, as well as to improve our competitive position.
In 2013, we rewarded our shareholders for the second consecutive year by paying two dividends, for a total amount of Ps. 1,568 million. The first dividend was paid in two equal installments in May and October totaling Ps. 568 million and the second in the amount of Ps. 1,000 million decreed and paid at the end of the year.
Our operating and financial results, as well as the positive expectations of the sector resulted in a very positive performance of our shares, the CPO closing at a price of Ps. 44.16, which represents a growth of 37%.
We will continue investing in and developing Megacable to be able to offer the best services and be a better company to work and invest in.
On behalf of the Board of Directors and the more than 12 thousand employees who make up this great company, I am grateful for the support and the trust placed in is by our customers and shareholders. We will continue investing in and developing Megacable to be able to offer the best services and be a better company to work and invest in.
Sincerely,
Francisco Javier R. Bours Castelo
Chairman of the Board of Directors
“In my capacity as Secretary of the Board of Directors, I hereby certify the authenticity of this letter”
Manuel Urquijo Beltrań
Secretary of the Board of Directors
