Revenues of Mexico's Axtel increase driven by cloud, cyber and government

Mexican ICT and data services company Axtel posted higher revenues in peso terms in Q3 driven by cloud, cybersecurity and government services and following a restructuring in 2023.

Net revenues amounted to 2.87bn pesos (US$140mn) in the quarter, up 3% year-on-year, with enterprise segment revenue 5% higher at 2.11bn pesos, the company said in its results report. 

The segment was bolstered by a 17% jump in cloud and cybersecurity, and also by digital transformation services.

During the quarter, Axtel introduced Oracle Cloud as a managed service, adding to its multi-cloud strategy to complement existing AWS and Microsoft Azure offerings. 

“Our business model based on business lines and industries has allowed us to grow the funnel of new projects by 65% and new contract acquisitions by 21%, year-to-date,” Axtel said about the enterprise performance.

The biggest quarterly growth came from the government division – 15% to 333mn pesos – in part prompted by services related to Mexico’s June presidential elections.

According to Axtel, the commitment to state and local governments “coupled with a more active federal administration following the electoral process” led to the double-digit expansion and to “favorable prospects” for public sector digital transformation projects.

Revenues from the wholesale unit, on the other hand, fell 12%, to 420mn pesos due to lower non-recurring revenues from high-capacity dark fiber contracts and to the gradual exit from the mass market in this segment that started in 2019. 

“On the positive side, wholesale connectivity access revenues, mostly with multinational operators, increase[d] 9% in the quarter,” the company said.

AI

Axtel is upbeat about opportunities in artificial intelligence.

The company sees the technology driving demand for high-bandwidth network infrastructure. 

Axtel’s networks spans 50,800km, connecting the main datacenters and industrial parks in Mexico, while its international crossings are reportedly able to support up to 800Gbps to serve, for example, hyperscalers. 

“This represents an opportunity to capitalize on this demand for fiber and capacity, as well as contribute to the evolution of AI in Mexico," the company said.

Axtel is also using AI internally for web scraping and artificial vision techniques. 

Web scraping is a technique that uses bots to extract data and content from a website.

It is adopted by businesses to gather data for market research, competitor analysis and machine learning models.

Axtel said that it managed to increase operational efficiency and customer satisfaction and reduce the risk of human error by employing AI.

“Critical validations that previously required human intervention 48 times a day, are now automatically executed 300 times daily, representing savings of more than 190 hours of monthly operation,” it said.