$850 million investment to be made by America Movil in Mexico
www.WirelessFederation.com/news: $850 million investment is eyed by Latin America’s biggest mobile operator America Movil SAB in its domestic operations by 2010. Operating in the 18 countries of Americas, the Company had reported
194.3 million wireless subscribers at the end of September.
America Movil’s largest market is Mexico where its TelCel unit had a 72% market share at the end of the third quarter, with 58.4 million subscribers. According to Movil’s Chief Executive Daniel Hajj, the company invested about $850 million alone in Mexico which may remain same in 2010.
As part of the federal government’s 2010 budget, Mexico’s Congress approved a 3% special tax on telecommunications services and a one percentage point increase to the national value added tax, including other tax increases.America Movil is still evaluating the impact that higher taxes will have on TelCel next year.
Earlier this month, fixed-line carrier Telefonos de Mexico SAB and America Movil’s sister company announced that it will not pass on the cost of higher taxes next year to customers.
Telefonica O2 Czech Republic nine month results: revenues flat but margins improving
In its unaudited financial results for the first nine months of 2006, released on Friday, Telefonica O2 Czech Republic (the former Cesky Telecom) announced that revenues were up 0.6% year-on-year to €1.61bn; operating costs were down 1.1% to €850m, operating income was up 21.7% to €336m and net income was up 33.9% year-on-year to €242m. OIBDA margin reached 48.9%, a 1.7 percentage point increase year-on-year and net margin was up 4 percentage points on the same period last year to 15%.
Comment: In our previous comment on Telefonica O2 CZ on its H1 results, we stated it was ‘as good as it gets’ for the operator. However, they have managed to impress us by improving their already very impressive margins even further. OIBDA was up from 48.5% in Q2 to 48.9% in Q3.
Although the picture is still pretty grim in the fixed segment with traditional access revenues down by 7.8% and voice traffic down by 13.3% it is not all bad news. Interconnection revenues increased by 2.5% in the first nine months of 2006 due to an increase in international transit traffic, and long-distance traffic also increased by 2.8% due to unification of local and long-distance call rates introduced in April 2006. Despite the introduction of aggressive cost reduction schemes leading to a 10% cut in personnel costs year-on-year and further integration and restructuring still to take place, the operator will find it hard to improve upon its current situation as competition increases and call prices continue to fall.
Internet and broadband revenues were up 7% year-on-year largely due to a 56% increase in ADSL customers from 274,000 in December 2005 to 427,000 at the end of September 2006. An aggressive marketing campaign for ADSL launched in Q1 2006 is proving successful in migrating customers from narrowband connections, with the proportion of total Internet customers with broadband access reaching 69%. This is an impressive rate of migration, but the high costs of marketing and discounted offers is leading to disappointing revenue growth relative to customer growth in this segment.
Mobile segment revenues were up 5.9% year-on-year with the proportion of revenues from data services increasing by 1.4 percentage points to 19.7%. This is an impressive level of growth, considering SIM-card penetration has reached 115% of the Czech Republic population.
Telefonica O2 CZ is still facing the same problem as many incumbents – fixed revenues in freefall, whilst mobile and broadband services generate growth. Its ability to limit this decline in traditional services and maximise growth from new wave services will determine if revenue growth remains positive. At present, Telefonica O2 CZ is operating at break even, but as mobile and broadband growth slows, the scales could easily tip into the red.
Source- http://www.ovum.com
