Strong subscriber growth boosts AM’s first quarter results

3 May 2011

Latin American telecoms giant America Movil (AM) has revealed that, on the back of increased subscriber numbers for both wireless and fixed telecoms services, in the three months ended 31 March 2011 total revenues rose by 6.3% year-on-year to MXN156.232 billion (USD13.56 billion). Wireless services (both data and voice) accounted for the bulk of turnover – 63.5% – having risen by 11.1% against the same period a year earlier, while mobile voice services contributed 47% of total revenue, having increased by 4.3% against 1Q10. Turnover from fixed line voice services, however, continued to decline, falling by 4.3%, with AM noting that expansion of such services in South America had not been enough to offset decline in Mexico, Central America and the Caribbean. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the three-month period stood at MXN62.104 billion, representing a 0.4% y-o-y fall, with AM pointing to Mexican fixed line incumbent Telmex as having registered a 10.3% decline in EBITDA, which it said had countered the 8.8% EBITDA gains of the group’s other operations. Net income in 1Q 2011 was MXN23.511 billion, up 12.1% from MXN20.970 billion.

In operational terms, at the end of March 2011 AM reported that its total wireless subscriber base stood at 230.889 million, up from 206.429 million a year earlier, with Telcel, its Mexican mobile unit remaining the largest contributor, with 65.655 million customers. AM noted that in the three months to end-March 2011 it had registered net additions of 1.5 million in Mexico, 38.2% more than it had in the country in the first quarter of 2010, while it also said that Brazil saw 1.8 million new wireless voice subscribers, 52.3% more than in 1Q 2010. Total fixed line customer numbers at the end of March 2011 were 53.060 million, up from 46.850 million in March 2010, with the company reporting that total broadband accesses across all regions of operation had risen to 13.6 million, with fixed voice connections totalling 28.7 million and pay TV accesses standing at 10.8 million.

AM also reiterated in its results that it plans to fight a fine levied by the Mexican antitrust watchdog related to alleged monopolistic practices. As previously reported by CommsUpdate, last month the Federal Competition Commission (Cofeco) confirmed that it had fined Telcel after it claimed the cellco had engaged in ‘relative monopolistic practices’ by overcharging its competitors to connect calls to Telcel subscribers. With the regulator handing out a MXN12 billion penalty, the largest ever levied in its 18-year history, AM noted in its results: ‘Telcel disputes such a fine, which we believe is illegal, arbitrary and opportunistic. As of the date of the accompanying financial statements, the Company and Telcel are evaluating the scope and legal grounds of said resolution and will exercise any and all legal actions and/or remedies to challenge it.’

Mexico, America Movil (AM), Radiomovil Dipsa (Telcel)