At a Glance: América Móvil’s investments

Mexican telecoms group América Móvil invested 66.3bn pesos (US$3.40bn) in the second quarter, 13% more than in the same period in 2018.

Compared to the quarter before, capital expenditures were up by over 57%. And from January to June, capex neared 95bn pesos, which compares to 81.1bn pesos the same period a year ago.

BNamericas takes a look at how these resources are being allocated.

MEXICO

In Q2, about a third of América Móvil’s revenues came from Mexico.

The company, which usually does not breakdown details per country, touted investments in homeland Mexico mostly in fiber-to-the-home (FTTH) and in rural coverage (principally in the southeast.)

“We have almost 5mn home passes with fiber to the home [in Mexico]. And then the rest, we are doing fiber to the curb in order to use the best technologies through copper,” CEO Daniel Hajj said in the Q2 earnings call.

Mexican fixed-line subsidiary Telmex is investing in a combination of VDSL and pair-bonding to improve speeds while expanding fiber to sell bundles with ClaroVideo and ClaroDrive security, for example.

Meanwhile, mobile arm Telcel aims to increase 4.5G coverage to more locations in the southern regions.

“We're putting more money to invest and to have more connectivity in the south, all Mexico and specifically more in the south of Mexico,” Hajj said.

Furthermore, América Móvil announced in June an investment with Telxius to deploy a submarine cable in the Pacific connecting Guatemala to Chile.

The new system is expected to be ready for service by the end of 2020.

It is due to be the first undersea cable since 2001 to connect Puerto San José (Guatemala) and Valparaíso (Chile), with additional landing points in Salinas (Ecuador), Lurín (Peru) and Arica (Chile).

BRAZIL

While Brazil falls under the group’s “other operations” revenue line, the South American giant is América Móvil’s second largest operation after home market Mexico.

Local subsidiary Claro Brasil aims to invest 10% more this year than the 8.8bn reais (US$2.21bn) it invested in Brazil in 2018.

The group has been investing significantly in Brazil for the past eight years, but capex increased principally in the last three, with a focus on fiber optics and 4.5G.

Overall, the company aims to pass 1.5mn homes with fiber in Brazil this year.

Claro Brasil is also in the process of taking over Nextel for which it promised to disburse US$905mn. The deal is expected to close this year.  

Games

But the Mexican group is also investing in new forays to diversify its revenue stream and face the new challenges arising from a more digital business model.

One of them is gaming.

Claro called a press conference for this week in São Paulo to announce a game platform. Details, however, have yet to be revealed.

The move follows similar announcements made by internet and tech giants.

Last October, Google announced its first venture in the gaming world with Google Stadia, while Sony and Microsoft also partner on cloud-based gaming.