Operating Results

Video

We are continuing with the implementation of a new generation of video services, which include the launch of Megacable Play and the increase in HD (High Definition) channels within our product portfolio.

The introduction of Megacable Play constitutes a great advance in the development of innovative video services aimed at new generations of consumers who can enjoy the best movies, television series, music, soap operas and their favorite news programs on their Smartphones, Tablets, PCs or televisions without depending on a fixed schedule. This service is managed in three formats: subscription, movie rentals and free of charge. We also have in the region of 4,000 series and movie titles, 25 live channels available for all the family.

The migration of our HD (High Definition)-format channels has continued to grow in order to be able to provide our customers with the best quality products. We ended 2014 with more than 60 HD channels. In 2015, we expect to reach more than 80 HD channels.

Our digitalization process has contributed to capturing more customers and increasing our market share by closing 2014 with 1.6 million digital video subscribers, which represents an increase of 25% over 2013. Digitalization will allow us to offer subscribers digital VOD services, premium channels, OTT and Internet access.

Internet

The penetration of Internet services has increased significantly; therefore, we have given ourselves the task of implementing steps that emphasize our main competitive advantage, which is connection speed. In 2014, we deployed a technological platform to commence the technological migration from coaxial cable to fiber optics, which translated into cost savings for the division and faster connection speeds than the competition, which vary from 300- 400 megabytes per second.

At year-end 2014, we have 1.3 million subscribers, which represent a growth of 40% compared to 2013, an increase in revenues generated of 22%, achieving an amount of 26 million pesos, to finish with an average revenue per user (ARPU) of 191.5.

Telephony

The Megafón technological platform continues to run under the IMS (IP Multimedia System) architecture network to offer our clients the integration of their fixed telephone lines with their cell phone lines.

In 2014, most of our customers migrated to this platform, whereas in 2015, we are planning that all of them will have this service. Megafón offers different unlimited local call tariff plans to cell phones and long-distance that meet the needs of each one of our customers and enables us to achieve greater market share and penetration. In 2014, we added 144,000 subscribers, which make a total of 721,000, which represent a 25% increase compared to 2013.