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June 29, 2022

High-speed internet in Puerto Rico, a conversation with V2A Consulting

The following transcript has been edited for length and readability. Listen to the entire discussion here on The Broadband Bunch. The Broadband Bunch is sponsored by ETI Software.

Brad Hine:

Hello, everyone in broadband land, and welcome to another episode of The Broadband Bunch. I’m your host, Brad Hine, bringing you another story from the world of broadband. Since the beginning of communications networks, individuals would spend years, sometimes decades amassing skills and experience to become experts in the new technology. This would always include the refinement of best practices in the planning, building, operation, and growth of that vital network line into a full-fledged future-proof business. The ultimate goal is to remotely connect everyone, no matter their location.

Brad Hine:

I’m sure not long after Alexander Graham Bell invented the telephone, expert groups formed to develop a reputation for proficiency in guiding those businesses in need. Thus, consultancies were born. Our guests today are Mario Gonzalez and Carlos Aponte. They serve and support broadband operators in the Caribbean region of the world. They are co-leads of the telecommunications practice at V2A Consulting, a boutique strategy and management consulting firm out of Puerto Rico. Mario and Carlos, welcome to the show.

Mario Gonzalez:

Happy to be here.

Carlos Aponte:

Thanks for having us, Brad.

Brad Hine:

Absolutely. Absolutely. I’ll tell you guys, I’ll get right into it, I want our listeners to find out more about V2A in the market, and especially your region, but first, can you share with our audience a little bit about how V2A got started in consulting, and how you’ve evolved over that time since your inception?

Carlos Aponte:

Sure. So V2A started about 15 years ago here in Puerto Rico. Our partners are ex-consultants from big national or international consulting firms. You know, the EYs, and McKinseys. And we started with local clients here in Puerto Rico, offering mostly strategic consulting services, and project management down here. Started mostly with financial services clients, also healthcare, and the healthcare industry, and then about 10 years ago, we developed a sort of expertise in mergers and acquisitions, especially in the post-merger integration phase. So whenever two companies decide to merge, how do we make those companies work together? And some of the bigger mergers in the telecom space down here started happening, and we developed a good relationship with one big telecom client down here, in one especially big merger, or merger integration. And since then, we’ve been supporting … Developed a passion for telecommunications, for internet, broadband, et cetera.

Brad Hine:

Excellent. Excellent. So in the last couple of years, we’ve heard a lot of talk about the industry infrastructure, especially here in the United States, that number being $65 billion, meaning they’re pumping this into the market. So how does this affect a company like yours in a region of the Caribbean? Now, is that a part of it? How is that working?

Carlos Aponte:

Sure. So in our case, Puerto Rico’s political situation is a bit different from the 50 states, but it is also similar because out of every infrastructure bill, or federal fund, there’s a little piece that is left out or saved for Puerto Rico, the US Virgin Islands, and other US territories. So whenever we see funds discussion happening in Washington, we get excited, because we know that something’s coming down here, and carriers here or ISPs down here prepare for some of that.

Brad Hine:

I see. I see. So then in your region, are you focused particularly on a certain size of carrier? You mentioned mergers a little bit ago, trying to help with solutions when companies merge. Are you trying to serve the underserved and the unserved? What’s that niche of the market you’re trying to hit?

Carlos Aponte:

So I think we support any kind of client. Of course, some of these funds, when we talk about funding, in general, our practice helps companies go through strategic programs, right? Or projects. So these kinds of projects, where you have to deploy broadband, for example, or a big merger, or any big transformation project, right? So recently we were involved in a huge customer experience transformation for one of our clients. So many of these big transformation projects we are involved in, and in terms of served and underserved, down here, most of our clients are trying to reach underserved areas, and areas that are already served, they are trying to transform into better broadband service or fiber to the home or whatnot. So in our case, as consultants, we support any client that is in need of our help, but of course, as citizens, we also try to make sure that we’re supporting companies that are doing the right thing in terms of providing service.

Brad Hine:

Great. Great. You talked about digital transformation, which I’ll get to in just a little bit, but overall, maybe talk through some of the challenges that you’ve seen when approaching customers, and when customers come to you with certain needs and solutions that you see in that market. So when you start a project, what’s the process that you go through with this customer?

Carlos Aponte:

So the first part of the process, I think, is understanding their current situation, and what kind of information they have available to make strategic decisions. And I think the main challenge that we’ve seen recently is the availability of data. You’d be surprised at how little data there is available, that our clients have developed over time, especially in a region like ours, where a lot of the growth has been through mergers. These are multiple companies or ISPs that are all small, and as they merged together, they never focused on the quality of information. And when they do projects like big build-up projects, or trying to deploy to further out areas, they do it more by intuition or by their visual assessment of, where can they reach, than, actual data of how many homes they’re trying to reach, or what is the need for broadband in that area? So that’s been a big challenge for us in getting our clients to gather data to make smart decisions.

Brad Hine:

Gotcha. Gotcha. So in mentioning some of the challenges that you just did, I’m sure a lot comes into the equation when you’re speaking with customers. RFPs are being written. You are consulting on the RFPs. So I’m sure things like how much these customers are trying to ask for, they still have to be competitive, and so that’s when your real value prop comes into your customers. And before we really get into your methodology and kind of the secret sauce, so to speak, how do you balance all that on the front end for your customers?

Carlos Aponte:

So when we talk about the RFP process for funding, which is a project that we’ve been working on for the last couple of years, and we know we’re going to be working on for a while now, with the recovery funds, or everything that’s coming out of Congress, the first thing that we try to figure out is, what are we trying to achieve, right? What is the end goal for this company in terms of what it’s trying to achieve with the potential funds gotten out of this? On the one hand, these funds are very public, and the intention of most of these funds is the ultimate getting people connected, right? And serving people that today might not have access to quality speeds, or good broadband service.

Brad Hine:

Sure.

Carlos Aponte:

So on the one hand, companies are out there to make money, right? So we have to make sure that our clients stay profitable. On the other hand, they have to make sure that their customers are happy, and that the overall community is satisfied with their approach to broadband deployment in a sense. So I think balancing that out is part of the game that we have to play, and at the same time, you have to be aggressive in terms of how many funds you’re asking for, and how competitive you are. Because some of these funds that come down to the states, or to territories, in our case, come down as competitive RFPs, or competitive bids, or auctions, where multiple carriers are trying to get those funds.

Carlos Aponte:

So in our case, as consultants, we see our clients that struggle sometimes because they’re focused on their day-to-day. How do we provide better service to clients? And then most carriers don’t have a separate team just to work on these RFPs, right? So that’s when they turn to us and we try to make sure that they put something together that is both good for the business and good for the community.

Brad Hine:

Gotcha,

Mario Gonzalez:

If I may add a little bit to what Carlos just said, it’s very important, or what we facilitate, based on our experience on doing strategy, is we approach making an RFP every time we approach a strategy project. “Where do you really want to go? What’s your vision? What do you want to get out of this? Are you a market leader, where you’re trying to protect your base? Are you a small entrant that you’re trying to disrupt your market, and you want to be aggressive?” And that sort of thing. Those are the things that we take into consideration when we’re facilitating those sorts of processes for our customers.

Brad Hine:

Gotcha. Gotcha. So if you could give us kind of a snapshot of Puerto Rico right now, in terms of numbers, you have an idea of the current number of folks that are served, that are underserved, that are unserved? Maybe some of the technologies that are involved in serving them with broadband? Do you have an idea of that?

Mario Gonzalez:

Yeah. Sure. So Puerto Rico is, it’s an island of about 3.3 million people. There are about 1.4 million households on the island. The majority of the houses are served by the Legacy DSL copper lines from the Legacy telecommunications provider. It was a national telecom provider, and telephone company provider. In the metro areas or populated areas, you do see fiber to the home, and fiber to the business. The main two competitors right now are the Legacy telephone company and the Legacy cable provider. So you do have hybrid fiber coaxial or coax networks around the island. The cable company provides the majority of the island, I would say about 80%. They are able to reach about 80% of the island, but the fiber is a growing area, and it’s starting to be available in more and more places. But in the rural areas, there are areas where you’ll only have your satellite providers or fixed wireless providers. We have every sort of flavor you can think, of in sorts of broadband here on the island.

Brad Hine:

Right. Right. And I had had some discussions before with folks from the Caribbean that also talked about not only you trying to serve the underserved and the unserved, but there are also other things that are hurdles, obviously from an operations standpoint. The weather. We live in the Southeastern United States, and we get some bad storms up here, but the storms that roll through your area of the world are pretty ferocious. I mean, obviously, those have to be considered. You have to build numbers like that into ongoing future-proofing the network and things like that. Is that true?

Mario Gonzalez:

Yes. I’ll take as an example, Uniendo a Puerto Rico, which is an expansion of the Connect America Fund. So for the RFP that was done in Puerto Rico, resiliency was a variable that was considered in the RFP. So providers that submitted an RFP to the FCC had to commit to a number of miles in each of the areas they were requesting funds for. So it plays a big, big part. Obviously, you want to build your network as resilient as possible, to be natural disaster-resistant, so making underground construction is very, very important, and getting underground to the very, very low-density areas is tough. So that is one of the main challenges our telecom providers face when they’re deploying their networks or planning their networks.

Carlos Aponte:

And also, the other thing that we see more and more down here is redundant networks, either because carriers or service providers build a redundant network or customers will buy a service from one fixed provider, and from a second one as well. So you’ll see a lot of, for example, our fixed wireless providers out there might be a second option for some of the customers that have the either Legacy DSL service or the coax cable modem service. Also, we had a huge storm about five years ago, Hurricane Maria, and all the networks went down for quite some time.

Brad Hine:

Right.

Carlos Aponte:

We’re talking four or five, six months where nobody had internet. And we saw that the smaller wireless providers or fixed wireless providers were the first ones up. The cost and speed to rebuild a wireless network are a lot more resilient in a way. So those are some of the dynamics that we see down here based on our propensity for storms.

Brad Hine:

That’s really interesting. So we often hear fiber is king, but obviously depending on your region of the world, especially where you’re from, fixed wireless is a key component, in kind of an evolving network, and in trying to, like you said, create a fail-over situation where everyone still has to be up and running, and they can’t go four or five months without internet connectivity.

Mario Gonzalez:

Not just without internet connectivity. The company starts operating, you still have a company to operate and rebuild where you’re going three to five months without revenues coming in.

Carlos Aponte:

Right.

Mario Gonzalez:

Because you’re not providing internet.

Carlos Aponte:

Right.

Mario Gonzalez:

So you have to have some sort of redundancy to keep the business going.

Brad Hine:

Right. Right. So let’s talk a little bit about that digital transformation and evolving network infrastructure. So in terms of your key messages as a company, I know you have your own methodology that you apply, that makes V2A Consulting who they are today, and it makes you stand out. Can you walk us through a little bit of that process, and some of the secret sauce, so you speak, without divulging too much?

Mario Gonzalez:

Sure. So right now, I guess digital transformation is a facilitator to our methodology because what we do is try to help our customers come up with a methodology to one, understand costs at a high level, but have better estimates than just a customer home past budgeting methodology, but also use the existing information to predict for future revenues.

Mario Gonzalez:

So for example, if you’re transforming your network from a legacy DSL or a coax cable network to fiber to the home network, where do you start building? Where do you drop your first fiber? Where are you going to get the best return out of your investment? Sometimes companies might focus just on ARPU, or just on where they have the highest penetration if they’re an incumbent, or the lowest penetration if they’re a market, someone that they’re trying to grow in the market. What we try to do is take a holistic approach, where we used the most data that we can that is useful data to help our customers define where they should start deploying their network, estimate how much it’s going to cost, and how much it’s going to get in return in their projects or programs to transform.

Mario Gonzalez:

So to add to the digital transformation part, since data is our main source of information to facilitate the prioritization process, if you have good data … Not just the data transformation, but a good data strategy to ensure that not just having data, but having data in a certain way that is useful can facilitate processes not just on the deployment side, but on the planning side, when you’re doing RFPs when you’re doing customer migrations, for example, from one to the other, et cetera.

Brad Hine:

Gotcha. Gotcha. You mentioned the importance of data. Obviously in digital transformation, data is everything, because it’s going to tell us where we started. It’s going to tell us how to make better decisions. We also need certain screens, and the ability to analyze that data. So how is that working for your practice internally?

Mario Gonzalez:

So internally we do have, we started as a traditional strategy and management consulting as Carlos explained at the beginning of our conversation. We recently introduced or started an analytics practice where we’re trying to exploit machine learning and business intelligence to facilitate how our customers do business in general. For example, how do you use notes in a call center to improve customer care? Or how do you use machine learning to provide recommendations of products in a variety of industries, similar to what Netflix does for their viewers? We could use those tools, and our analytic practice actually helps our customers go through that journey, and use their data to improve customer experience, improve revenues, improve profitability, et cetera.

Brad Hine:

Well, I’ll tell you, I’ll share a story really quickly. In terms of data usage, I can remember a project I was a part of about 14 years ago, where I went to a small city in the US, building a network may be very similar to a customer that would approach V2A consulting. And they started talking about their footprint, and a couple of guys walked over to these rolled-up, large sheets of paper, threw them on a desk, and was pointing at the different regions in the area on this piece of paper. And I remember thinking, “On my phone, I can already access a map in digital form. I wonder when these companies are going to be switching over to a digital form in a map?” So I guess formally we call that GIS. So has things like GIS helped you evolve and give more meaning to the data? How has that helped you over the last many years?

Carlos Aponte:

Sure. I think as I said at the beginning, right, some of the bigger challenges that we’ve faced is that access to data. And when we jumped into some of these projects, and we asked our clients about their footprint, most of the time, they struggle to be able to provide what their footprint looks like in terms of either home passed, or network mileage. Like Mario said before, some of the requirements down here for some of the funds is that the build-out is underground, right?

Brad Hine:

Right.

Carlos Aponte:

For resiliency purposes. And then when we ask our clients, “What percentage of your network is underground right now?” They have to go back and look at 1,000 PDFs of whenever they have their designs or their as-built blueprints of their build-out, back 10, 20 years ago, and now they’re seeing the value of turning all of that. They’re going through these huge projects of digitalizing all that information and bringing it to a new GIS system where they can quickly find a space on the map, and they’ll get to see what their build-out looks like there, how many poles they’re using, what equipment is connected to either the poles or the underground, where are the manholes at? All that information, they’re seeing it now, and it’s a huge investment for them, but they are able to reap the benefits of that rather quickly.

Carlos Aponte:

One of the challenges that we saw in our projects is, even operationally, when they would get a call from a customer that is unhappy, or that needs some sort of service call, they were finding it hard to even find the house of the customer, especially in rural areas. So as they start to implement and use GIS for that, they are able to get their service techs to connect to their phones, or provide them a tablet that tells them specifically what the coordinates of that client are. So it’s been huge, like Mario says, for planning purposes, but it’s also huge in the day-to-day, right?

Mario Gonzalez:

Right.

Carlos Aponte:

Even installing services, servicing, truck roles, et cetera.

Mario Gonzalez:

That impacts even more here in Puerto Rico, where addresses are not standardized, like on the mainland. For example, if you go to a rural area, 20 homes might share a postal service. So not even the USPS addressing might work, right? So when you’re doing serviceability checks to see if you can actually provide the service, it’s very, very important. And having a GIS and geolocated information for every single home that you actually passed, it’s massive when you’re actually selling your service, when you’re implementing customer care, and when you’re sending truck roles to the field to provide service to the customer. So it only gets better. It’ll only get better for telecom, and telcos, just because having that information is so valuable for their operation and for future planning as I mentioned before.

Brad Hine:

Yeah. I couldn’t agree with you more. I think as you kind of has talked through this podcast, I’m starting to visualize layers of what you’re working with in terms of technology, starting a project, going through all the feasibility studies, the RFPs, adding network consultants, adding software consultants into that mix, and all the solutions that you’re providing for these operators there. Is there a story that you can share with us that kind of speaks to some of your process or some of the successes that you’ve had?

Carlos Aponte:

Sure. I think as we mentioned before, over the last couple of years, we’ve been working on one big federal funding project called Uniendo a Puerto Rico. It’s like an extension of CAF, or the Connect America Fund down here, and we jumped into that about two years ago, and without knowing what would happen, it’s an FCC fund that had a reserve of about $500 million for the island, and it was a competitive bid. So in the end, we helped our client submit a compelling bid, and also win a good chunk of it, more than 50 million out of that.

Brad Hine:

Wow.

Carlos Aponte:

So we were very excited about it. And then the second part of that, which is most of what Mario has been supporting, is once those funds were awarded, getting together and designing the strategy for deployment. “What do we build first? What is the real cost? What is the ROI to these projects? How do we combine providing service in underserved areas with defending our base?” Right? “And improving or doing upgrades to our current clients, or current customers, for our operator.” So I think that’s been the biggest success, and listening to all the funds that are probably going to come down here eventually, we are excited that we are also going to be probably a part of that, right?

Carlos Aponte:

I was listening to your podcast, I think a couple of episodes back, where you interviewed somebody from the Treasury, and there was a fund, about $10 billion, that is given to state governments, right? And we see our support that could go out to either operators who are applying for these funds to be part of their broadband plan for the state, as well as states. States sometimes have to get together a good plan to request these funds. So I think our objective, and Mario and I agree that this is a great project, this is a great industry, and we see ourselves supporting either one of those cases.

Brad Hine:

Outstanding. Outstanding. Well, before we wrap for the day, I want to thank you guys for, joining us, but I have a couple questions for you that we ask everyone that comes on the podcast. Our first is what we call the Back to the Future question, and it’s very simply, if you had the ability to go back in the past, if you had that, if you will, time machine, DeLorean, to go back in the past and whisper some advice in your own ear before you kind of started this whole telecommunications practice with V2A, is there anything that you would whisper to yourself to give yourself an edge?

Carlos Aponte:

Well, going back to the same thing we’ve talked about, I think that it would be, “Take a better look at your maps. Deploy a GIS system quick. Put in place the data, governance, or master data management framework that you need to make sure that in the future, you have everything you need to make smarter decisions.”

Brad Hine:

So I’m seeing a trend here. I’m hearing a trend, is what I should say. So data is everything,.

Mario Gonzalez:

Data is everything.

Brad Hine:

So digital transformation means you have to grasp all the data that’s possible to make better decisions in the future.

Mario Gonzalez:

For sure. For sure.

Brad Hine:

So on the opposite side of that, I’ll ask you our crystal ball question, too. So basically, where do you see V2A in the next 5, 10 years, continuing along your journey as a consulting company in telecommunications?

Mario Gonzalez:

So I think not just for us, V2A, for in the telecom industry in general, the challenge is, how do traditional internet ISPs and fixed problem providers navigate how the wireless technologies succeed in the industry? And how do you transform yourself as a telco, from just a fixed broadband provider, or an internet service provider, to a connectivity as a service provider, where you provide connectivity services at any single point, at every second of your customer’s life? And how do you use all the technologies, both in the wireless and the fixed side, to provide that experience to your customers? And as a consultant, I can only hope that we are part of that journey, and we facilitate that transformation for the ISPs, not just here in Puerto Rico, but in the Caribbean, and in the US.

Brad Hine:

Well, I surely wish you, Mario and Carlos, all the best in the future. And for our audience, if folks want to find out more about V2A Consulting, where can they go to find out more?

Carlos Aponte:

Well, they can find us online, at our website, www.v2aconsulting.com. We have a LinkedIn page, which is also very active. So I think those two are the main channels for us.

Brad Hine:

Excellent. Excellent. Well, folks, that’ll do it for another episode of The Broadband Bunch today. I’m your host, Brad Hine. Thanks to V2A Consulting for joining us today.

Carlos Aponte:

Thanks, Brad.

Mario Gonzalez:

Thank you.

Brad Hine:

And for now, so long.