News
Latin American telecoms group reports difficult first quarter; customer numbers decline in Mexico.
America Movil reported a slight increase in group revenues in the first quarter of 2016, dragged down by a weak performance in Mexico, where increased competition and inconsistent holiday dates were behind a top line decline.
The telco posted group revenues of 222.99 billion pesos (€11.44 billion), up by 1.4% on the same quarter a year ago, while service revenues increased by 0.3% to MXN194.3 billion.
The company was hit by economic headwinds in the Latin American region, particularly in Brazil, but a revenue decline in its home market also took its toll.
Revenues in Mexico came in at MXN64.82 billion, down 2.6% year-over-year, with service revenues falling by 7.7% to MXN51.21 billion "mostly on account of lower mobile voice revenues following the introduction of more competitive plans and the impact of the Easter holidays," America Movil said in its Q1 report. Easter fell in Q1 this year, but in Q2 last year.
"Significant exchange rate volatility in the quarter hampered our commercial operations," America Movil added.
The company is facing additional competition in Mexico following the arrival of AT&T last year. In its first quarter results announcement earlier this week, the U.S. telco said it generated US$537 million (€474 million) in wireless operating revenues in Mexico in the three months to the end of March, more than double its year-ago figure. It added a net 529,000 mobile customers in the country during the quarter, comprising 116,000 postpaid and 450,000 prepaid users, to take its total base to 9.21 million.
America Movil lost 202,000 mobile customers in Mexico in Q1, with 203,000 postpaid net adds failing to offset 405,000 prepaid losses. It ended the quarter with a mobile customer base of 73.5 million.
Mobile ARPU fell sharply to MXN132 from MXN156 a year earlier.
Fixed lines in service declined by 1.6% year-on-year to 12.85 million, but fixed broadband connections grew by 4.2% to 8.84 million.
Domestic EBITDA fell by 16.7% on-year to MXN23.1 billion, again mainly driven by declining mobile and fixed voice revenues, "but also reflecting rental payments made to Telesites, which did not appear in the results a year before," America Movil said.
Telesites is the name given to the towers business recently spun off by America Movil.
The telco’s EBITDA margin fell to 35.7% from 41.7% in the year-ago quarter. "It is important to note that the impact of the currency depreciation on equipment revenues overstates the reduction of the EBITDA margin," America Movil said.
At group level the operator posted a 9.6% decline in EBITDA to MXN61.74 billion. Its net profit contracted by 41.7% to MXN4.8 billion.
