America Movil invests 57.2 billion pesos in Q2 2016

America Movil CEO Carlos Slim
Telecom network operator America Movil today said its capital expenditure (Capex) reached 57.2 billion pesos in Q2 2016.

The company will be spending around $7.5 billion to $8 billion during 2016, after Capex reduction.

It has invested a net of $33 billion for Capex (capital expenditure) in the previous three years. The company revealed that it will be investing 20 to 25 percent less this year against Capex of MXN164 billion or $8.57 billion in 2015.

America Movil said its second-quarter profit fell 45 percent to 7.7 billion pesos or $422 million in the second quarter of 2016, with stiff competition, government rulings and recession, affecting the figures. The telecom group has witnessed decreasing profit margin every quarter since the new rules set in 2014.

The company has a 70 percent hold on the Mexican mobile market. America Movil intends to offer pay-TV services at home, with permission from the Mexican regulator.

The company announced recently that it will invest $6 billion over the next three years in the Mexican telecom market out of which, half will be spent on its wireless services alone.

America Movil generated 30.6 percent revenue from Wireless Voice, 31 percent from Wireless Data, 13.4 percent from Wireline Voice, 15.5 percent Wireline and 9.5 percent Data Pay TV in the second quarter of 2016.

In Brazil, the telecom company owned by Carlos Slim suffered due to the economic downfall scenario prevailing in the country, where it ranks second in the market with EBIT going down by 50 percent due to higher maintenance costs and rising debt accounts.

The revenue at group level went up to 233.383 billion pesos or 6 percent, recovering slightly over the recession.

The company was also affected by falling wireless service charges, competing against AT&T and Telefonica, with profit margin going down to 33 percent from 41.4 percent in 2015.

The company owing a debt of MXN585 billion in 2015,

Net sales went up by 6.1 percent to reach 233.4 billion pesos. Also, the service revenue went up by 3.2 percent, while net income became 7.7 billion pesos going down by about 45 percent compared to that of the previous year.

Around 1.1 million and 575,00 connections were disowned in Brazil and Mexico respectively.

On Thursday, the company also revealed that it will reduce stake in Telekom Austria to more than 50 percent.

The company has made growing investments in 3G and 4G in Mexico, while cutting down on the Capex, with an aim to span 100 million broadband connections by 2020.  Also, the company plans on cashing in on the smartphone penetration, which will become more than 60% by the end of 2020, as per reports.

America Movil is also responsible for delivering telecommunication services through its three companies namely Embratel, Claro and NET for deploying  8,000 Wi-Fi hot spots for the upcoming Rio Olympics event held in Brazil. The Wi-Fi infrastructure also will be used to offload mobile data traffic from the Claro subscribers.