Telemig Celular Participaçoes [NYSE: TMB], the holding company for Brazilian regional mobile operator Telemig Celular, has announced a 63% year-on-year rise in first quarter profits thanks to strong subscriber growth and the recovery of the real. The Minas Gerais state incumbent cellco signed up 43,100 new pre-paid subscribers in the three months to the end of March, though there was a loss of 7,700 post-paid customers resulting in a pre-pay/post-pay mix of 67-33. The operator’s overall customer base grew 16.9% year-on-year to 1.96 million, some way ahead of its regional rival, the Telecom Italia Mobile (TIM) [Milan: TIM] subsidiary TIM Maxitel, which has around 700,000 customers in Minas Gerais.
Telemig’s net profit for the quarter amounted to BRL44.3 million and was given a significant boost by a BRL32.6 million gain made on the company’s unhedged dollar-denominated debt, following the recovery of the real against the dollar; EBITDA grew 10.4% to BRL109 million. Mobile penetration in Minas Gerais currently stands at just 19%, a figure Telemig predicts will rise to around 22% by the end of the year. It expects to capture at least half of all new customers, primarily with pre-pay tariffs. The cellco was also expected to have used the earnings report to announce details of an operational agreement with Amazonia Celular and Brasil Telecom [NYSE: BRP]. The agreement, which the three hope will give increased bargaining power with equipment suppliers, was provisionally agreed last December but has yet to be finalised.