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LatAm Wrap-Up: América Móvil’s mixed financials;Telefónica rumored to buy Iusacell

by Roberta Prescott
written by Roberta Prescott Share
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The Latin American giant telecom group América Móvil (AMX) posted its fourth quarter and full year results for 2013. While in the 4Q13, AMX’s profit rose 15.7%, when comparing the entire year of 2013 to 2012, net income was down 18%. According to AMX, in the fourth quarter, earnings per share were up 23.7% from the year before, partly reflecting the impact of share buybacks. Related to total revenues, in the 4Q13, they were up 3.1% year over year and up 1.4% when comparing all 12 months of 2013 to the year before. América Móvil closed 2013 with 270 million wireless subscribers.

MediaTek’s plans for Latin America: The leading chip supplier for Chinese smartphones, MediaTek, has turned its focus to smartphones, tablets and wearable devices. It is part of what Sergio Abramoff, senior manager for Latin America at MediaTek, named as the third wave of company’s growth—the first was focused on providing chipsets to Chinese companies and the second on expanding borders to the global brands, mostly feature phones. In an exclusive interview with RCR Wireless News, Abramoff commented that the shift has showed positive results: 220 million smartphone chipsets were sold in 2013, double the 110 million from 2012 and significantly more than the 11 million from 2011.

MediaTek is gaining ground quickly in the fast-growing market for smartphone applications processors and baseband processors, but Qualcomm continues to dominate. During the third quarter of 2013, MediaTek had 10% of the processor market and 12% of the baseband market, according to Strategy Analytics, while Qualcomm had more than 50% of both markets.

The Taiwan-based MediaTek is playing hard. According to Reuters, the company plans to hire about 150 engineers, business development and marketing staff in the United States, expanding its current 300-person workforce there. Outside the United States, the company plans to add 1,000 employees in 2014, increasing its ranks by around 10%.

The company’s plans also include emerging markets. The Latin American team is adding employees to make MediaTek stronger among both local and global cell producers. “Latin American local firms are maturing and growing. We want to help them gain space and importance among carriers,” said Abramoff. Typically, these companies usually start by offering feature phones, begin manufacturing entry-level smartphones and then produce more sophisticated devices. “We want to help them grow,” he said.

MediaTek is also betting on the feature phone market. Although it seems to be dropping, the feature phone market is not dead yet and can represent an opportunity for companies positioned in the emerging markets, including some Latin American and African countries, as well as in India, said Abramoff. While he acknowledged that feature phone business is not as profitable as the smartphone market, Abramoff said the large volume of sales may remain strong for the next two to three years.

Central America, according to Abramoff, is pushing this trend, as the hottest market for feature phones. On the other hand, in more mature Latin American countries, such as Brazil, feature phones sales are dropping at an average rate of 15%, according to the IDC.

In fact, MediaTek expected the feature phone business to decline much faster and deeper than it is actually dropping. Still, while global manufacturers are abandoning feature phones, local brands are filling the gap. This is the market MediaTek is addressing in Latin America. Also, the Taiwanese fabless semiconductor company is planning on increasing its share among local device manufacturers. Abramoff named Chilean Azumi, Mexican Lanix and Brazilian Positivo as examples.

Rumors: Telefónica is said to be in talks to combine its Mexican operations with Grupo Iusacell, which is co-owned by Mexican broadcaster Grupo Televisa SAB and billionaire Ricardo Salinas. The aim would be to form a bigger mobile-phone competitor to billionaire Carlos Slim’s América Móvil—Telcel controls about 70% of the market. This domination by a single carrier has pushed government regulators to implement plans to improve the competitive landscape.

LTE: Claro Uruguay has tapped Alcatel-Lucent as a supplier for their end-to-end LTE network and industry-leading IP networking technology. The subsidiary of the Mexican group América Móvil plans to have the network fully deployed and operational in Montevideo this month, offering customers HD video, video on demand, high speed navigation and other services. Additional phases of network deployment this year will increase coverage in Montevideo and other cities. The end-to-end solution includes eNodeB, MME and OSS.

 

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Editor, [email protected] Roberta Prescott is responsible for Latin America reporting news and analysis, interviewing key stakeholders. Roberta has worked as an IT and telecommunication journalist since March 2005, when she started as a reporter with InformationWeek Brasil magazine and its website IT Web. In July 2006, Prescott was promoted to be the editor-in-chief, and, beyond the magazine and website, was in charge for all ICT products, such as IT events and CIO awards. In mid-2010, she was promoted to the position of executive editor, with responsibility for all the editorial products and content of IT Mídia. Prescott has worked as a journalist since 1998 and has three journalism prizes. In 2009, she won, along with InformationWeek Brasil team, the press prize 11th Prêmio Imprensa Embratel. In 2008, she won the 7th Unisys Journalism Prize and in 2006 was the editor-in-chief when InformationWeek Brasil won the 20th media award Prêmio Veículos de Comunicação. She graduated in Journalism by the Pontifícia Universidade Católica de Campinas, has done specialization in journalism at the Universidad de Navarra (Spain, 2003) and Master in Journalism at IICS – Universidad de Navarra (Brazil, 2010) and MBA – Executive Education at the Getulio Vargas Foundation.

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