Chile's ClaroVTR on a path to recovery

ClaroVTR, the Chilean JV between Mexico's America Móvil and US-based Liberty Latin America, is developing according to plan.

“Our synergies, our revenues are going much better so we’re going to really focus on creating value in Chile,” America Móvil CEO Daniel Hajj said during an investors call. 

ClaroVTR is focusing on cost savings as part of plans both operators agreed.

“We have been losing some customers and we’re now growing the [number of] customers. We are improving and improving every day,” Hajj said.

ClaroVTR plans to invest US$400mn to improve and expand its fixed and mobile networks. US$200mn is earmarked for infrastructure and US$45mn for backup nodes and hybrid fiber coaxial cables, as well as fiber migration.

Participation in the 5G auction recently launched by Subtel is also on the agenda. 

As of June, ClaroVTR-owned and operated fixed networks passed 4.2mn homes and served 2.4mn revenue generating units, comprising 1mn broadband internet subscribers, 886,800 video subscribers and 437,000 fixed line telephony subscribers. It also served 372,400 mobile subscribers through MVNOs, according to the last quarterly report.

“The significant competition we are experiencing, together with macroeconomic factors, have adversely impacted our revenues, RGUs and ARPU,” the company said in its financial report.

América Móvil has provided most of the funds for the JV. Hajj told the call that financing mechanisms have been implemented to ensure adequate funding and avoid changes to the capital composition. “We are still thinking that Liberty will be our partner in the future,” he said.

RESULTS

América Móvil’s Q3 revenue reached 204bn pesos (US$11.3bn), down 3.3% year-on-year due to the Mexican peso's appreciation against other regional currencies. Service revenue fell 4.3% but grew 3.8% at constant exchange rates.

Operating profit was 41.5bn pesos, down 6.7%, while net income amounted to 2bn pesos. 

High net broadband additions were achieved in Brazil, Peru, Colombia and across Central America, according to the results report. Broadband penetration even grew in Argentina, despite the crisis the country is facing.

In Colombia, where Claro is investing in fiber optics, the company is gaining market share. “We believe the third quarter’s trend is the trend that we are going to see in the next quarter in fixed broadband,” Hajj said.

In Mexico, the company has 16mn homes passed with fiber and 76% of the customers connected. 

And in Brazil the company is “starting to grow in broadband again” and reducing losses in the pay-TV segment, while Argentina, where the company has 1.2mn broadband subscribers, offers vast fixed line opportunities.

América Móvil is deploying a new mobile network in the 700MHz frequencies in Guatemala. “We are not being so aggressive. We're not reducing prices and being more focused on quality,” Hajj said. 

Group broadband revenue expanded at 6.4%, the fastest rate in more than two years.

The company also reported that corporate network improvement became the second most important revenue line within the fixed-line platform after broadband services. It accounts for 19% of fixed-line services, reaching 25% in Mexico and 23% in Puerto Rico.

América Móvil does not plan to further increase investments, which this year will reach around US$8.5bn. The 2022-24 investment budget involves US$24bn. Third quarter capex was 100bn pesos.