Snapshot: The results of Mexican telco Totalplay

Mexican telecommunications company Totalplay is satisfied with its performance in the first half of the year but still must overcome risks associated with its negative results, fierce competition in the country and the need to invest to make its operations more efficient.

The company said in its recently released results report that the Mexican market is “highly competitive and experiencing significant pressure on rates.”

Totalplay has 5 million fixed broadband users, very close to the 5.1mn reported by Megacable, and behind Televisa, which has 5.7mn. Market leader Telmex has more than 10.9mn.

The company completed its investment cycle in fiber optics in 2023 and at the end of June it reported 17.5mn homes houses passed, similar to the figure reported at end-June 2023.

Capex for the second quarter was 2.67 billion pesos (US$144mn), equivalent to 23.9% of revenues, down from 40.3% reported in the same three months of last year.

The proportion of homes passed with Totalplay's telecommunications services increased to 28.5% at end-June, up from 26.2% 12 months earlier.

"The focus on customer satisfaction and acquisitions enabled [the company] to surpass historical performance levels and solidify its position in the industry," CFO Alejandro Rodríguez said during the firm's results call.

The number of net additions reached 101,702 from the end of 1Q23, in line with the strategy of moderating the growth of the subscriber base, the company said in its report.

Although in the earnings call Totalplay highlighted that it reduced its disconnection rate to 1.4%, the company's report states that it could suffer more disconnections than those it is capable of replacing.

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“If Totalplay does not maintain, update and efficiently operate the accounting, billing, customer service and administration systems, it may be prevented from maintaining and improving its operational efficiencies,” the company said in the report.

The Mexican operator increased its service revenues by 13% year-on-year to 11.2bn pesos in 2Q24.

However, the firm still made a net loss of 3.73bn pesos in the quarter compared with a net loss of 310mn pesos in 2Q23.

The company said the loss was partly due to the depreciation of the peso in the period.