America Movil posts steep 4Q loss on peso depreciation, customers decline
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America Movil, the Mexican telecommunications corporation owned by billionaire Carlos Slim, posted a net loss of MX 11.295 billion (US$ 609 million) for the fourth quarter, its second straight net loss and its biggest in 16 years, as the Mexican peso depreciation against the dollar and euro lowered its revenue. However, earnings before interest, tax, depreciation and amortization (EBITDA) rose more than 13% in Mexico and more than 11% in Brazil over the previous year.
According to its quarterly report, America Movil ended 2017 with 362 million accesses worldwide on 83 million fixed lines and 279 million mobile lines, slightly less than a year before, with mobile postpaid and fixed-broadband accesses increasing 6.4% and 4.2% respectively, while mobile prepaid and PayTV accesses fell by approximately 2.6% each. In fixed voice the company lost 1.9% of accesses as clients moved to triple play packages or to postpaid mobile services.
Nonetheless, it added 1.7 million mobile postpaid subscribers in the fourth quarter —one million in Brazil, 206,000 in Mexico and 109,000 in Austria —to finish the year with 70.6 million subscribers worldwide. Postpaid net adds surpassed those of the year-earlier quarter by 26.6%. In fixed broadband the company gained 321,000 clients in the quarter.
Q4 results reveal that the carrier saw a customer decline year-on-year in the U.S. from about 26 million customers this time in 2016 to about 23.1 million customers for the fourth quarter of 2017. That’s a loss of around 3 million customers in a year’s time. America Movil operates a number of prepaid brands in the United States including TracFone, Safelink, Straight Talk, Total Wireless and others.
“We finished the year with 23.1 million subscribers —11.3% less than a year before— after net disconnections of 685,000 Safelink subscribers in the quarter and net gains of 74,000 clients in our other brands,” Mexico’s America Movil wrote in its fourth-quarter earnings report (PDF).
The company will spend around US$ 8 billion on capital expenditure this year, up from US$ 6.95 billion in 2017, Chief Executive Officer Daniel Hajj said during a conference call. These resources will be used to modernize its mobile telecommunications infrastructure in Brazil and Argentina, as well as to increase its service coverage in Mexico.