About the project
A Venezuelan telecommunications operator that provides high-speed internet services for homes and businesses. It put on hold since 2017 the first commercial relationship with FYCO, which the company maintained under a different name and activity. This client proposed to expand, in 2020, its portfolio of fiber optic network services, assemble and synchronize its FTTH network (Fiber To The Home for its acronym in English) a segment that was just beginning to resonate in Venezuela. This created a new opportunity for FYCO.
The challenge
FYCO took on the challenge of reestablishing the commercial relationship with this operator by helping it synchronize its FTTH network in Venezuela.
For this, meeting delivery times was key. However, the global context (with the COVID-19 pandemic first, and the war between Ukraine and Russia later) presented a complex logistics scenario: the increase in the cost of freight and raw materials was compounded by a constant delay in delivery times. In 2019, for example, a shipment from China to Venezuela cost US$5,000 and took 35 days, while in 2022 it could cost more than US$20,000 and take up to 5 months.
“The first challenge was to rebuild trust with the client, to bring them back with a turnkey process in terms of logistics and distribution of materials.”
Key Account Leader FYCO
The strategy
- Turnkey process
To re-establish the business relationship, FYCO offered the operator in question a turnkey service, which included financial and logistical support.
- Financial support
In order to facilitate the procurement of the first materials, FYCO provided financing for the acquisition of routers, which allowed the client to extend the originally planned purchases to new inputs, such as fibers and boxes, financed in periods of 6 to 12 months.
- Purchasing advice
When planning its first fiber optic needs, the operator requested a smaller quantity than it ended up requiring. In search of a solution, FYCO Venezuela contacted its own warehouses in Panama and Costa Rica, checked inventories for the requested material and was thus able to cover the order. From then on, FYCO helped the client accurately estimate its future demands and added a technical team that participated in periodic customer advisory meetings.
- Macro Purchase Orders
In addition to impacting freight costs, raw material prices and delivery times, the pandemic also caused shortages of certain products, so FYCO offered its client to generate a macro order for the materials required for 6 months and divide the deliveries, as well as the payments, on a bi-monthly basis. In this way, this client was able to have the requested stock in a timely manner and, at the same time, maintain its cash flow.
- Biannual review, no overstock
In order to meet the client's changing needs, FYCO established semi-annual -and not annual- contracts with the operator, thus avoiding overstocks and unnecessary purchases.
- Air shipments
Due to the confinement in China caused by the pandemic, there were occasions when FYCO had to negotiate with its supplier the partial advance of batches by air, in order to avoid stock-outs for its customer.
“Venezuela is going through a very difficult economic process, but it is, at the same time, a very virgin country: if you invest in something that is really worthwhile, you will get a lot of benefit. No matter how complicated the situation is, the Internet will always be important because it is a basic need.”
Key Account Leader FYCO
Figures
- 8,910 kilometers of fiber optics provided to the customer
- 5,060 kilometers of fiber deployed between 2021 and 2022
- 130,000 ONTs (Optical Network Terminal)
- 55,000 customers connected by the operator from products provided by FYCO
Results
- Customer satisfaction
The sum of forecasts and additional services provided by FYCO (anticipation in the supply of materials, macro purchase orders with partial deliveries, financing and use of alternative logistics channels, among others) allowed the company to meet delivery deadlines and helped the client to successfully deploy all its facilities in a timely manner.
- Leadership in several parts of the country
After having displayed With more than 5,000 kilometers of fiber optics between 2021 and 2022, this operator managed to position itself as a pioneer in several Venezuelan states and is today one of the companies with the largest fiber laying in the country. In fact, it is the first ISP to provide fiber optic internet in the state of Nueva Esparta. It also has deployments in Caracas, Valencia, Puerto Cabello and Maracay, among other places, so it expects to have more than 100,000 people connected by 2023.
- Increased turnover
The positive experience that the client had with FYCO in 2020 and 2021 led the company to progressively increase its orders, to the point that, by the end of 2022, FYCO tripled its turnover with this customer compared to the previous year and had already placed purchase orders for the first quarter of 2023.
- Learning for the internal team
At the beginning of the pandemic, only two people were part of the FYCO team in Venezuela. The experience with this customer allowed the company to gain experience in technical, commercial and logistical issues, which led to the development of new projects and products, and allowed the good experience to be replicated with other clients.