Unefón swings to profit, but revenues continue to fall

31 Oct 2006

Mexican mobile operator Unefón posted a net profit of MXN107 million (USD9.9 million) in the third quarter of 2006, compared to a loss of MXN107 million last year, despite revenues declining by 13% year-on-year to MXN884 million, the company said in a statement. The profit was primarily the result of a number of one-off exceptional gains related to changes in ownership of the company. EBITDA was down 19% to MXN148 million. Unefón ended September 2006 with 1.29 million mobile subscribers, down 9% compared to 3Q05, as the company chased higher revenue post-paid subscribers with mixed results. Contract customers made up 12% of the total customer base at the end of the period, compared with 9% a year earlier, but down from 14% in the previous quarter. Monthly blended ARPU shrank to MXN209, down from MXN216 in 3Q05.

According to TeleGeography’s GlobalComms database, in early September Unefón and sister company Iusacell announced long anticipated plans to merge in a bid to provide a stronger challenge to market leaders Telefónica Móviles México and Telcel. The merger will create an enlarged company with more than three million customers and a nationwide footprint. Iusacell and Unefón already share some of their CDMA infrastructure, including high speed CDMA2000 1xEV-DO networks. Mexican tycoon Richard Salinas owns stakes in both companies through various subsidiaries, and as a precursor to the deal, Salinas’ Unefón Holdings increased its stake in Unefón from 44.4% to 100%. It purchased 45.6% of equity from the Saba family for USD300 million in stock and cash, which included the transfer of its 50% stake in wireless broadband provider Cosmofrecuencias to the Sabas.

Mexico, Iusacell (inc. Unefon), Unefon