America Movil not expecting higher capex levels due to 5G: CEO
Mexican telecom giant América Móvil’s expected launch of 5G in certain markets will not represent a boost in its planned capex for this year, CEO Daniel Hajj said during the telco’s Q1 results call.
The operator confirmed it will invest $8 billion this year, including 5G plans in several countries across the Latin American region.
“We have been working to implement 5G, virtualizing networks, putting fiber in the towers, putting the photonics in the backbone … We are ready to launch 5G in many countries,” Hajj said.
Hajj also that America Movil was not planning to increase capex levels in the coming years due to the launch of 5G services.
In a previous call, Hajj had said that the telco had intentions to acquire 5G frequencies in countries such as Brazil, Colombia and the Dominican Republic. Regarding Mexico, he commented that, although they are interested in the 5G auctions that will probably take place in October, the company already owns frequencies in the 3.5 GHz spectrum in that market.
America Movil’s plans for 2021 also include the US$6.2 billion sale of its subsidiary TracFone in the U.S., completing the acquisition of Brazilian mobile operations, and a spin-off plan for its Latin America tower business.
According to America Movil’s CFO Carlos Garcia Moreno, the TracFone deal is expected to be closed during the third quarter of this year. “We are working very closely with Verizon and the regulatory authorities to get clearance on that transaction and we think this transaction will be closed in the third quarter of this year,” Garcia Moreno said.
The TracFone deal had been announced in September 2020. TracFone is the largest virtual mobile prepaid service operator in the U.S. and has a subscriber base of 21 million, according to América Móvil.
Hajj also said that America Móvil expects to complete the acquisition of Brazilian operator Oi’s mobile operations this year. The group made a joint offer of 16.5 billion reais (US$3.22 billion) with Telefonica and Telefonica Italia (TIM) in December.
“On Oi, the approval process is advancing accordingly with different stages. All parts are connected to cooperate with authorities during this process and we think we can close this transaction this year … We hope that this year we can consolidate Oi in our financials,” he said.
Revenues for Q1 totaled 248 billion pesos (US$12.5 billion), down about 0.8% year-on-year while net profit rose to 1.81 billion pesos in the first quarter, compared with a loss of 28.9 billion pesos for the same period a year earlier.
America Movil’s base mobile subscribers grew by 6 million, a third more than the previous year, led by Brazil, Mexico and Colombia.
The carrier added 246,000 broadband clients, mainly in Colombia, Ecuador and Peru.
“We ended March with 374 million access lines, 2.8% more than a year before with our postpaid base and our fixed-broadband accesses increasing 7.8% and 4.7%, respectively,” the company said.