Telmex net profit drops as fixed line subscriber numbers decline

26 Oct 2010

Mexico’s dominant fixed line provider Telefonos de Mexico (Telmex) has announced a 21.5% year-on-year drop in net profit as it continues to shed fixed voice subscribers in light of increasing competition from cableco and mobile operators. In the three months ended 30 September 2010 Telmex posted a net income of MXN3.76 billion (USD305 million), down from MXN4.79 billion in the same period a year earlier, while revenue fell to MXN28.6 billion in 3Q10 from MXN29.5 billion in 3Q09, representing a 3.2% decline. Earnings before interest, tax, depreciation and amortisation (EBITDA) meanwhile stood at MXN11.49 billion in the telco’s third fiscal quarter of 2010, falling from MXN12.96 billion a year previously.

As at end-September 2010 Telmex reported that it had 15.622 million fixed lines in service, having lost around 1.7 million since end-September 2009, and down 122,000 on the previous quarter. The telco claims that including Mexican mobile voice services and rival fixed line operators it had market shares of 14.6% in the telecoms market as a whole, and 78.7% in fixed telephony. Subscriber numbers for Telmex’s high speed internet service have, however, continued to climb, and at 30 September 2010 the operator served 7.17 million broadband customers, up from 6.3 million a year earlier.

Mexico, Telefonos de Mexico (Telmex)