Mexico’s incumbent operator Telmex has reported its first rise in profit for two years for the second quarter of 2003, boosted by a jump in the peso against the US dollar which reduced its foreign debt. Net income for the three months to the end of June rose by 53% compared to the same period of 2002, totalling MXP6.2 billion, while total debt decreased by 16.9% from USD6.8 billion in June 2002 to USD5.6 billion a year later. Total revenues for the quarter stood at MXP27.9 billion, a slight decrease of 0.3% in twelve months, which the telco put down to a cool phase in the local, domestic long-distance and international long-distance markets.
Telmex has faced competition in the Mexican long-distance and international markets since the start of 1997 and in the local telephony sector since 1998, and whilst its share of the first two has been eroded on an annual basis, it still has a stranglehold on the country’s local access infrastructure. During the second quarter of 2003, it added 329,103 lines to its network, taking the total to 15.07 million, an annual increase of 8.5%. Around 40% of its lines are in the metropolitan areas of Mexico City, Monterrey and Guadalajara. Telmex’s most serious competition in the provision of local services comes from Axtel and Maxcom which between them had just over 500,000 lines installed at the end of 2002; the two operators claim that their rollout of local services has been persistently delayed by interconnection disputes. Telmex also saw an increase in the number of data and internet accounts during the second quarter of 2003, adding 53,340 internet access accounts bring the total to 1.29 million. ADSL subscribers rose to 122,514 from 66,566 at the end of 2002.