05/19/2008


Performance of A. Móvil/ Telmex and Telefonica in Latin America in 1Q08

 

Four groups concentrate 86.3% of the cell phones and 79.1% of the fixed telephones of Latin America (without Caribbean).

 

 

The mexican Group of Carlos Slim (América Móvil/Telmex) and Telefonica are the two biggest telecommunication groups of Latin America with 68% of the cell phones and 52% of the fixed telephones.

 

Considering global revenue, Telefonica group is the biggest with net revenue of US$ 22.1 billions.

 

Note: Revenue of Telefonica and Telecom Italia according to IFRS and Móvil/ Telmex according to countable standard of mexican. Revenue and Ebitda of Telefonica are proportional to its participation in the operator (Including 62.94% of Vivo).

 

In Latin America, América Móvil/Telmex's group surpassed in the 1Q08 and Telefonica in net revenue and EBITDA margin.

 

Latin America Results in 1Q08

 

US$ Billions

A. Móvil/Telmex
Telefonica
Net Revenue
11,742
8,187
EBTIDA margin
41.2%
36.4%

 

Both groups dispute the market of fixed telephony and cell phone. In the last 12 months Telefonica grew in quantity of cell phones (23%) and América Móvil/Telmex led fixed telephony growth, because of Embratel's expansion in local telephony in Brazil.

 

 

Cellulars in Latin America in the 1Q08

 

Millions

Cellulars
Fixed
A. Móvil/
Telmex
Telefonica
A. Móvil/
Telmex
Telefonica
Accesses
149.3
103.7
25.2
25.6
∆ Qter
3.7%
3.1%
1.3%
0.8%
∆ 12 months
21.4%
23%
12.8%
4%

 

This framework will be hardly changed in short time by organic growth of current operations of these groups.

 

Telefonica can improve its position in the region with the acquisition of Portugal Telecom's participation in Vivo, but to approach the Group of America Movil/Telmex in Latin America it would have to incorporate the operations of Telecom Italia in Brazil and Argentina.

 

With the joint venture of Tim (Brazil) and Telecom Personal (Argentina), Telefonica would have 149 million cell phones and 30 million fixed telephones in Latin America in 1Q08. It will be very difficult, however, seek the approval of the authorities for the incorporation of Telecom Personal in Argentina. Both are the 2 main operators of fixed telephony in the country. Telefonica can avoid it ends in the hands of its biggest rival in the region.

 

The competition between these groups is not limited to fixed and cellular telephony. Besides the broadband, both groups are growing in the market of pay TV in the region.

 

You could ask:

  • Consolidating its position in the Americas, will the mexican group expand to other regions?
  • Are there other international operators interested in operating in Latin America? and in Brazil?
  • What are the plans of Nextel group? And Vodafone has just join Entel in Chile?
  • Is there room to Oi/BrT's growth in Latin America?

 

Commentaries

 

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