Fast Growth, Big Opportunities

IFXCorp. is building a Latin American ISP business. It sees a fixed wireless opportunity where local telco equipment and copper are sub-par.

by Alex Goldman
Associate Editor, ISP-Planet
[June 30, 2000]

IFXCorp. (NASDAQ: FUTR) is an Internet services company focused on the Latin American market. The company's free ISP, tutopia, reached 870,000 subscribers on June 20 (tutopia is an aggregate word that means "your utopia" in Spanish). It also owns Unete, an Internet infrastructure company with POPs in over 100 cities in the region and direct satellite links to the US Internet.

The main chance
Joe Eidelstein, President and Chairman of the Board, says that the low quality infrastructure and high prices in Latin America are a great opportunity for fixed wireless. Providing DSL is nearly impossible as it is difficult to get access to local COs, and the quality of the local copper is unpredictable.

He adds, "we're adding customers as fast as we can string wireless." Many small businesses are still using dialup access, with expensive metered calls. Unete has produced a rapid buildout using fixed wireless in the unlicensed 2.4 GHz spectrum.

To solve legal problems, the company began a rollup, acquiring local ISPs more for talent and licenses than for their infrastructure. On the other hand, it has been difficult at times to import expensive equipment to some of these countries.

The free ISP
When tutopia, the free ISP opened up, it launched with a glitzy marketing campaign. Viewers, it appeared, simply did not believe the free web access offer, so tutopia switched to a simple, black-and-white ad with several bullet points. The response was tremendous.

Tutopia provided e-mail, free Internet access, and other goodies such as a calendar. It added a comprehensive bill of rights protecting subscribers' privacy. It also disclaimed all responsibility for local phone circuits.

Soon tutopia was providing Unete with customers as small businesses, such as doctors and lawyers, who had been online for free for several months, decided to upgrade to fixed wireless dedicated access.

Investments
IFXCorp., like many Internet companies, has invested in related companies. It owns about 10% of yupi.com, a major Spanish language portal. It is a founding investor in several other companies. Facilito is a clicks-and-mortar retailer organized with both online and streetside storefronts to encourage trust (facilito is a joint venture with intcomex, a computer retailer). e-pagos is an e-commerce enabler providing Web services, credit card services, and marketing services.

Even tutopia is an investment of which IFXCorp. owns less than 50% (Joe Eidelstein assured us that tutopia will remain a network customer of Unete, and IFXCorp. will retain the equity stake).

—End