America Movil (NYSE:AMX) is looking to apply its Latin American playbook to Eastern Europe by investing in fixed-line services, its CFO has said.
In an interview with Reuters, Carlos Garcia Moreno drew parallels between the current Eastern European…
America Movil (NYSE:AMX) is looking to apply its Latin American playbook to Eastern Europe by investing in fixed-line services, its CFO has said.
In an interview with Reuters, Carlos Garcia Moreno drew parallels between the current Eastern European telecoms market and Latin America a few years ago, which saw a dearth in fixed-line investment following the rapid growth in mobile.
Garcia Moreno said Europe could potentially contribute 15% of America Movil’s revenue by 2020, more than doubling the current 7%. His comments follow America Movil recording a 25.4% drop in second-quarter net profit in July compared to the same period in 2014 due to an economic slowdown in Latin America.
Garcia Moreno said European subsidiary Telekom Austria (VIE:TKA) should, as its parent company had done in Latin America, develop Eastern European fixed-line platforms to support the next stage of mobile data services. He said this could be done through acquisitions or organic means.
At the end of July, Telekom Austria’s Bulgarian cellco Mtel agreed a deal to buy Bulgaria’s second largest fixed-line operator, Blizoo. In another fixed/mobile deal last year, Telekom Austria snapped up Blizoo’s Macedonian business as an add-on to its local mobile operator VIP. VIP is also close to completing its takeover of rival One, in a three to two consolidation play.
In addition to the regulatory headwinds the Mexican giant is facing at home, it is “seeing a mixed bag of economic indicators throughout Latin America,” Garcia Moreno said on the recent Q2 results call.
