August 12, 2015 / 11:40 PM / 4 years ago

Slim's America Movil eyes European fixed-line telcos

MEXICO CITY (Reuters) - America Movil is still sniffing out deals in Europe, which could become twice as important for the Mexican telecom company’s revenue base within five years, its chief financial officer said on Wednesday.

America Movil's Chief Financial Officer Carlos Garcia Moreno smiles during an interview with Reuters at his office in Mexico City, Mexico August 12, 2015. REUTERS/Henry Romero

Shares of America Movil, which is controlled by the family of billionaire Carlos Slim, are down more than 5 percent this year as it grapples with the prospect of competition from AT&T Inc, tough new regulation in its biggest market, Mexico, as well as likely recession in its second-largest market, Brazil.

But in Eastern Europe, where it already has a foothold through its subsidiary Telekom Austria, the outlook is brighter, and it was “feasible” the company could draw 15 percent of its revenue from Europe by 2020, CFO Carlos Garcia Moreno said in an interview.

Europe presently makes up just under 7 percent of revenue for Latin America’s biggest telecom company.

Eastern Europe is similar to Latin America several years ago because people stopped investing in fixed-line networks when mobile took off, Garcia Moreno said. America Movil wants to repeat its success in Latin America, where it is by far the biggest operator, by investing more in fixed-line.

“In Eastern Europe you need to build a lot more, develop the fixed platform much more for the new phase of growth in mobile data services,” he said. “In this process there are acquisitions that can be made.”

He declined to say which companies America Movil would go after and noted assets on offer are scarce. Many opportunities to expand will instead come through organic growth, he said.

In the last 18 months, the company bought up cable companies in Bulgaria and Macedonia for undisclosed sums.

Despite interest in Eastern Europe, Garcia Moreno said the company had opted out of the coming privatization of Serbia’s Telecom Srbija, for which bids were due by Aug. 2.

In Mexico, Slim has faced a regulatory crackdown from a new law and increased competition after AT&T entered the market by buying up the No. 3 and No. 4 wireless carriers.

The mobile markets in Mexico and the United States have been integrating as several North American firms are now offering “borderless” plans between the countries.

But Garcia Moreno said America Movil did not need to own a network in the United States to be competitive in Mexico.

He declined to say whether the company would be interested in buying Deutsche Telekom-owned T-Mobile US Inc., which has been the subject of takeover speculation.

In Brazil, where four mobile operators have sought to reduce the number to three, consolidation is accelerating, and the outcome will depend substantially on which companies have invested in their networks, he added.

Additional reporting by Dave Graham; Editing by Matthew Lewis

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below