BCP acquisition will lift América Móvil to second place

1 Sep 2003

Mexico-based operator América Móvil has announced plans to purchase troubled Brazilian cellco BCP, in a deal which will make it the country’s second largest mobile operator. The acquisition, which is worth around USD625 million, is one of the last in the consolidation of Brazil’s mobile market, and comes amid signs that the sector is beginning to recover after a two-year depression. The USD625 million enterprise value of BCP is well below expectations of between USD750 million and USD900 million, but América Móvil will take on its USD1.3 billion in debt. At the end of June 2003 BCP had around 1.7 million customers, with the total number of mobile subscribers in the country reaching 38 million at the same date, up from 34 million at the end of 2002. América Móvil faces competition from number one operator Vivo, the joint venture between Telefónica and Portugal Telecom, as well as Telecom Italia Mobile (TIM) and Oi, which is owned by domestic fixed line telco Telemar.