América Móvil foresees US$8bn capex for this year

Mexican telecom giant América Móvil expects its capex to come in at around US$8bn this year after slashing investments by about 30% in 2020 due to the coronavirus pandemic. 

The company plans to earmark part of its 2021 investment budget to the purchase of 5G frequencies around Latin America, CFO Carlos García Moreno told a conference call with analysts on Wednesday. 

Estimated 2020 capex was US$8.5bn, but the telco decided to delay non-necessary projects as a result of the COVID-19 emergency, reducing the amount to around US$6bn. Last year’s cuts, however, did not affect growth, capacity, quality or digitization efforts, CEO Daniel Hajj said during the call.

While telecom regulator IFT has not confirmed plans to tender 5G frequencies this year, company executives said there could be options for the technology in Mexico during the last quarter of 2021, adding that they are reviewing regulations. 

Mexico has still not launched a single 5G network. According to Hajj, plans of President Andrés Manuel López Obrador's administration to increase spectrum fees will only delay the launching of the latest cellular technology even further. The CEO said the company already pays too much for spectrum in Mexico. 

Regarding Brazil, Hajj said the 5G auction could take place in the first or second quarter of next year, according to rumors.  

Wednesday's conference call follows the release of América Móvil’s fourth quarter earnings report, which cited strong net additions all around the region, and plans to spin off the operator’s 35,000-37,000 towers in 15 countries.     . 

For the last quarter of 2020, the company controlled by the family of business mogul Carlos Slim saw revenues of 255bn pesos (US$12.7bn), down 3.1% year-over-year. Revenues from equipment sales fell 9.4% while service revenues increased 2.2%. 

TOWERS SPINOFF

América Móvil announced on Tuesday that its board had approved a plan to spin off its towers and other related passive infrastructure in Latin American countries.

“We’re working on that and we’re analyzing what’s the best way to give value to the towers,” Hajj said, adding that the company is reviewing regulations in each of the 15 countries concerned. 

The strategy seeks to maximize infrastructure value and create an independent company that can focus on the management, construction and sharing of the towers. The move is expected to be completed this year.