Millicom CEO explains how telecom operator achieved cut in Opex

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Millicom CEO Mauricio Ramos has explained how the telecom operator achieved cut in Opex in the second quarter of 2018.
Millicom revenue Q2 2018Millicom said its total revenue was $1,541 million (+4.8 percent) in Q2 2018. Latin America revenue was $1,412 million, while Africa revenue was $129 million, Millicom said in a media statement.

“Our strategy is working, and with growth back on track, we continue to sharpen our focus on costs, and operational efficiency improvements are driving cash flow growth in many areas,” Mauricio Ramos said.

Opex

Operating expenses of $558 million declined 0.5 percent. Excluding the impact of IFRS 15, Opex rose 3.3 percent due to 4.2 percent increase in selling and marketing costs to support growth initiatives and 2.4 percent in general and administrative expenses due to higher network maintenance costs associated with network expansion in Latin America.
Millicom Opex Q2 2018Operating profit reached $256 million (+30 percent) reflecting a $27 million improvement in EBITDA, $11 million reduction in depreciation and amortization expenses, and $20 million from the sale of towers in Paraguay and Colombia.

Capex

Capital expenditures (Capex) excluding spectrum and license reached $217 million (–5.8 percent). Capex for Latin America was $209 million, while Capex for Africa was $7 million in the second quarter.

Millicom spent 88 percent of Capex on networks in Latin America, while the balance 12 percent was on IT and other area. Millicom spent 71 percent of network investment on fixed and 29 percent on mobile.

Millicom deployed customer premise equipment to support the growth of fixed customer base that rose 23 percent and accounted for more than 32 percent of total Capex in the Latin America region.

4G networks coverage reached approximately 60 percent of the population with an addition of 786 points of presence. Millicom’s fixed fiber network has reached 110,000 kilometers in Latin America.

The telecom operator said Capex in Africa were $7 million in Q2 2018 against $19 million in Q2 2017. Millicom decided not to participate in the recently-completed 4G spectrum auction in Tanzania.

Baburajan K

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