Entel 2011 capex similar to 2010, but focused on data centers, GPON infrastructure

Friday, January 28, 2011

Chilean telco Entel is expecting similar or slightly higher levels of capex in 2011, compared with US$550mn spent in 2010, with more resources potentially going to its GPON and data center infrastructure projects, company CFO Felipe Ureta told a conference call with investors.

Meanwhile, the recently announced management structure is designed to move the company more toward offering integrated services for enterprise and residential customers.

"One important focus for Entel is to develop data center capabilities for our IT business, which is growing at around 15% in Chile, so there is a lot of demand for capacity," Ureta said.

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"Also we have our GPON fiber project for the main cities to enhance the capabilities of services provided to enterprises, and we will continue expanding that project. Those are the main areas where we may see some expansion of capex compared to 2010."

Last year Entel saw revenues from data services, including IT services, rise 7% to 85.1bn pesos (US$176mn) and grow 21% in the fourth quarter compared with 4Q09.

Entel's former corporate general manager Richard Büchi said last July that the company was seeking to reach 100,000 connected companies over the next few years with its GPON platform, and that investment in the project totaled US$7mn-8mn to date. Entel launched in August a full range of on-demand services over the GPON platform.

The project is part of Entel's increasing focus on corporate IT and communications services. The company inaugurated in May a US$20mn data center in capital Santiago, Entel's sixth in the country. The master plan is eventually to have a total of 8,000m2 of data floor space, which will be developed in four stages according to demand.


Entel has just announced a reshuffle of management, which saw Antonio Büchi installed as the company's new general manager, replacing Richard Büchi, who will move to executive vice president of Grupo Entel.

Antonio Büchi will also act as general manager of the company's mobile operator arm, Entel PCS.

Currently, Entel's fixed wireless services target mainly the enterprise market, while mobile is for big corporations and residential. But the services are still sold to customers by different divisions of the company. That is to change.

"Today we face in many cases different types of customers, most of which are from the enterprise area, who want one complete solution of fixed and mobile services. Until now we've been offering that with two faces," Ureta said.

"On top of that, we feel most residential revenues come mainly from mobile. But adding some fixed-line services, we might be able to increase our reach to those clients and maybe in the medium term be able to access new segments in terms of people and in terms of residential offerings," he said.