Megacable trims investments, surpasses 100,000km in deployed fiber

In line with its direct competitor Totalplay, Mexico's third largest fixed broadband provider, Megacable, is holding back with its investments and overall spending.

In 3Q24, the company's capex was 2.75bn pesos (US$140mn), down 27.4% compared with 3Q23, its financial reports show.

As a result, the capex-revenue ratio ended the period at 33.5%, sliding from 40.7% in 3Q23. In comparison, Totalplay's capex-revenue ratio was down to 26.5% from 36.9% in the same period.

Until last year, Megacable was still seeing a consistent, upward post-pandemic investment trend, with capex reaching 3.79bn pesos in 3Q23 and climbing 38.2% year-on-year.

In its financial statements, the company says that the current capex trend is “in line with the expected slowdown in the investment cycle for the year. The number of additional kilometers and homes passed recorded in this quarter reflect the slowdown in the execution of the expansion project.”

“The visible decrease in the pace of investments has supported the reduction in the leverage ratio for this period, which remains one of the lowest in the industry,” it added.

At end-September, Megacable's net debt was 21.9bn pesos, surging 16.1% year-on-year due to forex and inflation effects. However, it said its leverage decreased compared with 2Q24, declining to 1.54 times.

FOOTPRINT 

Megacable reported revenues of 8.2bn pesos for the quarter, up 9.7% year-on-year, and a net addition of over 180,000 unique subscribers in July-September, which was the highest quarterly figure in eight years.

The company ended September with close to 17mn homes passed with fiber, up by over 400,000 during the quarter, and 5.35mn unique subscribers, up 11.7% year-on-year.

Its total fiber footprint surpassed the symbolic threshold of 100,000km, for an increase of 10.7% in the annual comparison.

The growth in the subscriber base was driven by 12.7% growth in internet customers to 5.15mn, equivalent to 581,000 net adds over the year.

Telephony subscribers increased 17.5% year-on-year to 4.59mn while video segment clients were down 1% to 3.86mn.

In the mobile segment, clients for its Megamovil 4.5G MVNO reached 512,563, up 24% from 3Q23.