América Móvil not upping LatAm capex because of 5G

Mexican telecoms group América Móvil does not plan to increase its Latin American capex in 2020 and 2021 because of 5G technology.

CEO Daniel Hajj said current investment levels in the region are in line with the needs of the markets, and the focus now is on expanding fiber, on 4.5G, and on network virtualization. 

The first country where América Móvil will turn on a 5G grid is Austria, where the Mexican group controls local telco Telekom Austria, according to the executive.

“We are not in a hurry to get 5G in Latin America. What we're doing right now is to virtualize the network and add much more fiber to the node and some things that we're going to use in 5G when we decide to launch 5G,” Hajj said on an earnings call.

The CEO added that Austria’s 5G launch will take place in February and that in other markets the company is committed only to doing tests and to prepare the networks for future 5G launches.

The company invested 100bn pesos (US$5.2bn) in the third quarter, up from nearly 92bn pesos the year before and from 66.3bn pesos in Q2.

DIVESTMENTS

Unlike its rivals, América Móvil does not intend to divest any telecom asset in the near future, such as datacenters or antennas sites. 

The group spun off its tower business years ago.

“I think we are in a very good position financially and we're trying to get the target for next year. And so we don't have any pressure to spin-off any of our important assets at this moment,” Hajj said.

Telecom Italia, which in Latin America controls TIM in Brazil, is mulling a spin-off and listing of its datacenter business while Telefónica announced plans to monetize an additional portfolio of wireless telecom assets within the next 12 months.

Oi

América Móvil has interest in Brazil’s Oi, Hajj said. 

The executive said the fate of the Brazilian telco remains unclear, but his company is open for discussions.

“There's a lot of rumors that Oi is for sale. Some of them are that some assets are going to be for sale, others that they are going to sell it totally or they're going to mix it. Of course we are interested in doing something with Oi in Brazil and we are open to discuss anything that will be.”

Recently, America Móvil denied being in talks with rivals TIM and Telefônica Brasil for a joint takeover followed by a split-up of Oi's assets.

Oi is in judicial protection since 2016 and has struggled to curb cash burn and to increase revenues.

On Wednesday, Oi said in response to market regulator CVM that it continues to assess with its financial advisers how it will carry out the issuance of debt and securities to raise extra cash.

CENTRAL AMERICA CONSOLIDATION

With respect to its participation in Central American consolidation, América Móvil expects the deal to acquire Telefónica's assets in El Salvador to close in due time. 

The transaction is in good process even though regulators there requested additional information, executives said.

In Mexico, on the other hand, a license to provide pay-TV services filed with regulator IFT last year is still pending approval. The company recently submitted additional information requested and the process remains under analysis. 

América Móvil said its application complies with all current regulations and its entrance to the local pay-TV market would be in "the best interest" for consumers.