Letter from
the Chairman of the Board

To the Megacable Holdings S.A.B. de C.V. General Ordinary Shareholders’ Meeting

Dear Shareholders:

For Megacable, 2019 was a year of surmounting challenges largely due to the country’s economic recession, which was reflected in the negative growth of the GDP during the year and had a strong impact on the growth of the markets in which we participate in the Video, Internet and Telephony segments.

To overcome these challenges, we worked on the design and implementation of new strategies, focusing on improving ARPU and achieving a more stable subscriber base; this allowed us to achieve positive results while retaining our leading status and the highest margins in the industry.

Our positive results have been made possible by a number of factors which include: our ability to adapt to market demand, the new video platforms we have developed and implemented in line with the evolution of how subscribers view content, and our decision to efficiently adopt new technologies to meet the demand for higher Internet speeds. We have demonstrated, once again, that we are a company capable of adapting to the challenges of the marketplace in order to grow both operationally and financially.

Our next generation platform, Xview, was launched in 2017 and continues to be a great success. In 2019 we continued to improve this service by adding new content through a greater number of partner agreements in order to offer more available hours, increasing the number of views and improving the platform’s contribution to the Company’s revenues. In 2020, we will continue to work on the next generation of Xview powered by Android TV, a platform that promises to be a decisive step in terms of product differentiation from other options in the market, allowing us to continue to attract subscribers.

With the strategies implemented in the three mass market segments we achieved healthy margins, maintaining our position in the market.

In the corporate market, we have sustained growth in both connectivity solutions and infrastructure and innovation products, and very significantly in security services. At the end of 2019 we completed the construction of our Data Center, which will strengthen our offer of key services and upgrades in the coming years.

Moreover, during the year we strengthened our infrastructure through the expansion of our network, building new routes with the aim of providing a better service.

In November, we launched a new FTTH (Fiber To The Home) infrastructure construction project with GPON (Giga Passive Optical Network) technology to be deployed in the main cities where we are present.

We estimate that in approximately two years we will complete the migration of subscribers whose service is currently through HFC (Hybrid Fiber and Coaxial) to the new network. It is important to mention that the HFC equipment will be reused in other locations allowing us to increase our bandwidth capacity in all the regions in which we operate.

During 2019 we continued the optimization of our Xview platform.

In addition, at the end of November we started our mobile virtual operator service with very competitive rates and packages which have been very well accepted by the market.

Our aim is to continue being one of the most important players in telecommunications in Mexico and a benchmark for the efficient evolution of networks towards new technologies. This will allow us to continue offering high quality products and services which, together with our focus on customer service, will guarantee that we will remain in the preference of our subscribers while continuing to generate value for our shareholders.

To our investors, management team, Board of Directors, and our more than 21 thousand employees, my deepest appreciation for your support and commitment in a difficult year in which, thanks to your hard work and effort, we achieved the results that allowed us to continue being the leading company in the cities in which we are present.

Francisco Javier R. Bours CasteloCHAIRMAN OF THE BOARD

Manuel Urquijo BeltránSECRETARY OF THE BOARD