Chileans sell savings in time of crisis

Three entrepreneurs, through YX Wireless, offer communication optimization to Latin American companies through ingenious devices.

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The first one was an expensive device similar to the Flight Simulator, a popular video game about flying simulation. Then a computer program for fleet management was introduced. Curiosity always motivates Alejandro Patillo, Felipe Vásquez and Mike Leatherbee, three Chilean engineers who are just over 30 years old, who met each other at the Catholic University by the end of 90’s.

Once they finished their studies they were enthusiastic about creating their own company. They joined a lost telecommunication company, which intended to make the interaction between fixed line telephony and mobile phones more efficient. After a valuable but not very profitable experience, they decided to develop YX Wireless in 2003; a company that – by definition – sells savings to companies through the “re-boosted mobile telephony”.

They recognize they have not invented anything new with “least cost routing” (LCR), the formula to reduce costs to mobile phones. However, these three partners account for operations in 13 Latin American countries, including Chile Their sales are over three million dollars and there are waiting to enter the US market, where they hope that their proposal to optimize call routing will be very well received during this period of crisis.

The company launched its latest product, Xibelis Lyric LCR, to the market on April 2009. This product attempts to lower prices to 20 pesos (0,03 dollars) per minute to a mobile phone, a long way  from 50 pesos (0,09 dollars) per connections without “routing” and the 80 pesos (0,15 dollars) in contacts between fixed lines and mobile phones. According to its own estimations, a company with high traffic of 18000 calling minutes in a month – valued at 1,4 million pesos (2546 dollars) – should save about 80 percent when paying for the same service, almost 234000 pesos (425 dollars).

Real innovation

YX Wireless has three business areas that not only allow it to advance in triple technological development, but also allow it to diminish the risks in slower periods. Security lines were added to the LCR, through alarm systems in properties based on wireless connection to Internet, and M2M (machine to machine), with applications that allow for operation capacity to public phone lines and automatic teller machines (ATM).

The Partners created an integral marketing strategy as a formula to penetrate unknown markets, and at the same time generate confidence among potential customers. “we made an intelligent move. Apart from manufacturing a high quality product, we made sure that it looked good, with attractive packaging. Furthermore, we gave ourselves a coherent image from the web page to the office itself,” Alejandro Patillo says. And it worked, during the first three years, about 70% of its exports were done without having scheduled a business trip.

Despite the fact that the firm has been growing substantially every year, the projections for this season are in the process of “evaluation”. For this reason, and focused on the first two lines of development, YX Wireless will look to immediately migrate to similar products, but operated through IP telephony.

“The most important thing is to have objectives clearly stated because it shows you how to develop your whole strategy. Another relevant aspect is to know how to be small. To be in the individual user segment you have to be a monster, and that’s a fight that we can’t fight” says Patillo as he sums up the philosophy of this 30 person company. Its head office located in Ciudad Empresarial about ten kilometres away from Santiago downtown.

This post is also available in Spanish