YOU ARE AT:AmericasLatAm Wrap-Up: Telefónica, América Móvil Q2 results; LatAm investment leaders

LatAm Wrap-Up: Telefónica, América Móvil Q2 results; LatAm investment leaders

The two largest telecom operators in Latin America have released their second quarter financial results. América Móvil beat expectations, reporting better-than-expected second quarter core profits and revenue, as more customers made mobile calls in Mexico and South America. As for the Spanish group Telefónica, the carrier cut borrowing to under $66 billion, putting it on track to meet full-year debt targets, Reuters noted.

Telefónica also announced plans to acquire Dutch rival KPN’s German unit for $10.7 billion in a deal to be financed through cash and shares, despite its two-year drive to pay down debt.

In the second quarter, Telefónica’s revenues totaled $19.149 million, up .5% year-on-year in organic terms, with strong acceleration in Latin America (+10.4% year-on-year) and improving trends in Europe. Latin America accounted for 51% of consolidated revenues. América Móvil’s consolidated revenues were up 1.6% from the previous year’s quarter to $15.37 billion.

LatAm telecom investment growth: According to data from Ovum and AHCIET’s Observatory, Chile, Brazil and Argentina lead telecom investment in Latin America. Chile had the highest telecom investment per capita in the region in 2011 with $69.83 per inhabitant, followed by Brazil ($63.36) and Argentina ($59.94). Following in fourth and fifth place were Mexico ($31.34) and Colombia ($30.64). The countries with the highest absolute investment growth between 2008 and 2011 were Argentina (97%), Colombia (40%) and Chile (35%), followed by Mexico (20%) and Brazil (20%). On the other hand, mobile average revenue per user decreased between 2008 and 2011 in Mexico (–15%); in Brazil, Chile and Colombia (–13%); and Argentina (–1%).

LTE auction in Peru: Peruvian telecom operators Movistar and Entel won spectrum for the provision of LTE services in the country. Mobile operator Movistar, a subsidiary of Telefónica, acquired Band A in the 1710-1770 MHz band with an offer of $152 million. Meanwhile, Americatel, the local unit of the Chilean telco Entel, won Band B in the 2110-2170 MHz band after bidding $106 million. Four carriers were qualified to bid in the auction: Telefónica Móviles (Movistar), América Movil Perú (Claro), Americatel Perú and Viettel Perú.

Commenting on the auction, Marceli Passoni, senior analyst at Informa Telecoms & Media, noted that Entel will challenge competitors with its acquisition of LTE spectrum. In April, Entel acquired local mobile operator Nextel, which was historically an iDEN operator. “It was struggling to migrate its customers to 3G services. Instead of investing in expanding 3G networks, Entel will be able to deploy the latest technology and have a competitive advantage over its rivals,” Passoni said. America Movil’s subsidiary Claro, which had 44% of the Peruvian mobile market in the first quarter, did not acquire LTE spectrum. Passoni believes that Claro might be waiting for a 700 MHz spectrum band auction.

More news from Latin America:

  • Millicom and EPM reach a principal agreement. The companies concluded principal negotiations on structure and key terms for the combination of Millicom’s Colombian operations with the fixed-line company UNE to create an integrated digital player.
  • A new report published by GSMA finds that mobile broadband has the potential to bridge the digital divide and connect 149 million people who are at the bottom of the socio-demographic income pyramid.
  • Argentina’s Movistar, Personal and Claro are ready to invest a total of $1.55 million, local newspaper Clarin reported. Investment will be focused on improving customer experience. Nextel has not released its plans, since its Argentinian unit is expected to be sold soon.
  • The Brazilian telecom union, SindiTelebrasil, has a new president: José Formoso, the president of Embratel, will be in charge of the organization for the next two years. He is replacing Antonio Carlos Valente, Telefónica’s CEO.
  • Mobile lines in Ecuador reached 17 million in the end of first half 2013, 4.73% higher than the first half of 2012.
  • Ceragon Networks has been selected by Vivo, a subsidiary of Telefónica Brazil, to become its wireless backhaul partner for the next phase of Vivo’s nationwide LTE network. The orders are valued at more than $6 million.

Be sure not to miss what’s happening in Latin America’s wireless markets. Check out RCR Wireless News wrap ups.

 

 

ABOUT AUTHOR