Earlier this month, Mexican telecommunications company Total Play announced a 39% growth in revenue for Q3 2020.
The company, which offers subscription television, internet, and television services, said their revenue grew to 3.688 billion pesos ($175.957 million) from about 2.683 billion pesos ($128 million) the previous year.
Total Play CEO Eduardo Kuri credited his company’s superior offerings for the growth.
"Our technologically advanced triple-play services translate into a notable market positioning and into the preference of an increasing number of users in the country," he said. "Superior attributes, coupled with greater geographic reach, further strengthened revenue and EBITDA this period, and generated strong prospects for outstanding performance in the future."
The successes come after a dramatic net loss in the previous nine months. According to the quarterly report, Total Play lost a total of 967 million pesos ($46.137 million) in the last three quarters, which the company attributes to the greater spending needed to grow the company.
According to the report, the costs were “mainly derived from the acquisition of connection links for optimal network operation fiber optics, cutting-edge content that satisfies thousands of users, and telecommunications equipment for business clients.”
The Mexican Telecommunications Market
Much of the company’s recent success can be attributed to Mexico’s low penetration rate, which experts note is an emerging market for telecommunications infrastructure and investment.
Perhaps an additional driver of Total Play’s comeback is its cross-market offerings. The company has expended a sizable amount to build its broadband infrastructure as well as to develop offerings that users can utilize with that broadband.
The financial commentary website Fitch Ratings reports that at the conclusion of last year, 67% of the company’s revenue came from the residential sector and 32% came from the enterprise sector.
Additionally, the website said that the company’s expansion stands out among a competitive industry.
“This will position the company as an important player in the industry in terms of network coverage and should improve its market share in the near term,” the article read. “A key factor to improving revenues and cash flow is to monetize its Fiber Optic deployment by increasing its customer penetration.”
That penetration is expected to come to about 22% at the end of the year, which is lower than its competitors. Despite this, Fitch Ratings says, the company’s fiber-optic network will help set it apart from competitors, many of which use slower broadband technologies.
COVID-19 Pandemic’s Impact on Broadband and Internet-Based Services
The COVID-19 pandemic has drastically increased the desire for at-home media consumption across the world.
In the first two quarters of 2020, streaming giant Netflix added a whopping 26 million paid subscribers to its platform — which boasted over 193 million subscribers at the end of Q2 2020.
Likewise, streaming services Disney+ and HBO reported subscriber growths of 60 million and 36 million, respectively, in the first two quarters.
“There are a decent amount of people who have never been exposed to Netflix before, even though they’re the most used service, so when COVID hit, Netflix benefited from that growth,” said Steve Nason, a senior media analyst at Parks Associates, in an interview with The Verge.
He said that much of the company’s strength is due to original offerings and that Netflix’s lack of pre-existing content could be a source of slowed growth in the future.
“Netflix will certainly have to keep up with it,” Nason said. “Netflix has been able to transform themselves as an original content powerhouse. They still have to keep that output up to an extent, especially with each of these new major competitors figuring out different ways to go about grabbing subscribers. The key thing is the exclusivity of it all.”
Total Play has also experienced relatively substantial growth in the first few months of the coronavirus. The company saw a 26% increase in subscribers, growing to just short of 1.9 million.
“We are the only Triple Play company with a complete direct-to-home fiber-optic network,” said Kuri, “and our Internet services with maximum speed and constant innovations in our products make us the best connectivity and entertainment option for thousands of users.”