America Movil SA, the largest provider of wireless services in Latin America, said it plans to provide cable services in Central America and expects to spend US$3.2 billion (€2.4 billion) this year on upgrades including new mobile phone technology throughout Latin America.
America Movil executives also said Thursday that the company is looking for alternative partners to acquire a minority stake in Telecom Italia after AT&T Inc. backed out of a joint bid with the Mexican company.
But America Movil Chief Executive Officer Daniel Hajj said he does not think the company needs to find a partner before Monday, when its exclusive negotiating period expires.
“We don’t think we need to have another exclusive” agreement, he told a conference call with analysts to discuss first-quarter earnings. “We don’t have anything today, but we are still looking for alternatives.”
San Antonio, Texas-based AT&T and America Movil were offering US$3.81 (€2.80) a share for a one-third stake in the Italian holding company Olimpia, Telecom Italia’s main shareholder, but AT&T pulled out of the deal earlier this month.
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Hajj said he didn’t know why AT&T pulled out.
Despite its interest in the Italian company, America Movil will continue to concentrate on Latin America, Hajj said.
“The growth is going to be in Latin America, and the focus is going to be in Latin America,” he said. “But we are going to be open to other opportunities.”
Responding to news reports that the company was interested in buying a cable company in Honduras, he said that they were interested in providing full voice, data and video to clients in Central America.
“We need to buy a cable company. We’re going to do it,” he said. In South America the company will continue with only wireless services, he said.
America Movil plans to make capital outlays of US$3.2 billion (€2.4 billion) this year, Hajj said, some of which will focus on providing UMTS, or universal mobile telecommunications system, in 30 to 40 Latin American cities in 2007.
UMTS is a third-generation mobile phone technology standard that supports high-speed data services. It is designed to succeed the GSM, or general system for mobile communications, the standard used by America Movil and other mobile operators around the world.
On Wednesday, America Movil reported a 52.5 percent increase in net profits thanks to a higher sales and an expanded subscriber base.
The company, controlled by the world’s second-richest man, multibillionaire Carlos Slim of Mexico, said net profits increased to 15.8 billion pesos (US$1.4 billion; €1 billion) from 10.4 billion pesos (US$948 million; €695 million.)
Net earnings were above expectations at US$0.81 per American depositary share, compared with US$0.54 in the first quarter of 2006.
Revenues totaled nearly 68 billion pesos (US$6.2 billion; €4.5 billion), up from nearly 53 billion pesos (US$4.8 billion; €3.5 billion) in the first quarter of 2006, a 28 percent increase.
The company added nearly 6.5 million wireless subscribers in the first quarter of 2007, to total 131 million at the end of March, up 30 percent from 101 million in the same period last year.
Of those, 564,000 were gained through the acquisition of Verizon’s assets in Puerto Rico.
In addition to its wireless services, America Movil had 3.9 million land line’s in Central America and the Caribbean, for a total of 135 million lines at the end of March, the company said.
America Movil’s American depositary shares were trading up 4 percent early Thursday afternoon to US$54.27 (€40).
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