América Móvil sees postpaid subs surge, joins tower spinout crowd

América Móvil, thanks mainly to a depreciation of the Mexican peso against most other Latin American currencies, posted a Q4 year-on-year drop of 3.1% in consolidated revenues to a shade over 255 billion Mexican pesos (US$12.7 billion). Service revenues, at MXN206.7 billion ($10.3 billion), were flat.

Looked at through the lens of constant exchange rates, the Q4 picture is brighter. Helped by an uptick in postpaid and fixed broadband revenues, sales from services – once those pesky exchange rate fluctuations with the region's currencies are ironed out – increased by 2.2%.

That's primarily because América Móvil boasted an impressive 6.8 million increase in wireless subs net additions during Q4, which was twice as many as the previous quarter.

Of that number, 2.7 million were postpaid subscribers, the bulk of which came from Brazil (almost 2 million). A further 223,000 came from Peru, while Colombia chipped in with 201,000 postpaid net additions. In the prepaid segment América Móvil gained 4 million subs. Brazil and Mexico each contributed 1.2 million here.

América Móvil also increased its installed base of fixed broadband connections by 5.4% during Q4, adding 208,000 new accesses.

The group's reported EBITDA margin, at 32.5%, was up 1.4 percentage points compared with Q4 2019.

This increase was small fry, however, compared with a massive 79.6% jump in net profits, year-on-year, to MXN37.3 billion ($1.9 billion). América Móvil, as a way of explanation, cited favorable Mexico peso exchange rates with the US dollar and the euro.

In a spinout

A brief statement accompanying Q4 results revealed that América Móvil's board of directors had approved a plan to spin out its tower assets in Latin America.

"This spin-off," ran the statement, "will maximize the value of the infrastructure by becoming an independent entity entirely focused on development, construction and co-location of towers for wireless services."

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América Móvil expects to complete the "reorganization of assets" in 2021. What the end game might be to monetize those assets – an IPO, as planned by Vodafone's Vantage Towers, or a full-blown sale in the style of Telefónica's Telxius – is not yet clear.

As of December 31, 2020, América Móvil's net debt stood at MXN647 billion ($32.3 billion), equivalent to 1.93 times EBITDA.

— Ken Wieland, contributing editor, special to Light Reading

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