Slim is out to conquer Europe
Carlos Slim bet in the telecommunications business in the European market; to gain control and 60% of Telekom Austria, a company with operations in seven countries, America Movil will accelerate its expansion on the continent, through investment in infrastructure as well as the possible purchase of more companies.
The next big bet Carlos Slim in the telecommunications business is in Europe. After trying unsuccessfully to acquire KPN, America Movil (AMóvil) Dutch accelerate its expansion in East and Central European stock by Telekom Austria, which firm has 60 percent of its shares.
"We will invest very strong in Europe in the deployment of infrastructure in the coming years ... it is a market with great potential ... do not rule out buying companies," said Carlos Garcia Moreno, CFO of America Movil, in an interview with El Financiero .
According to the executive, the company will begin to increase their share and profitability in the countries of Eastern Europe, including Austria, Belarus, Bulgaria, Croatia, Macedonia and Serbia, which has 20 million subscribers.
However, the company could easily move into countries like Poland, Czech Republic, Hungary and Romania with a focused strategy prepayment schemes attractive to subsequently convert these into postpaid users.
A third step would be to bet on more mature markets such as Germany, Switzerland and other Northern European, which compete with giants such as Telefonica, Vodafone, T-Mobile and Orange.
All this, to the strict regulations that America Movil faces in Mexico, where it seeks to spin off assets to exit the preponderance, and because it is a leader in most of the 17 Latin American markets where it operates.
"In Latin America, America Movil has difficulty growing, while Europe has a minimum footprint with many options for acquisitions in a stage of industry consolidation. There are currently more than 100 operators who could buy, "said Jorge Negrete, director of Mediatelecom.
REGION WITH OPPORTUNITIES
The European market has a value equivalent to the US, with 443 billion euros (MDE) and 438 million lines associated with a smartphone.
In 2014, America Movil earmarked some 60 billion pesos to the European market, which accounted for 75 percent of its investments in acquisitions and licenses, according to its annual report.
In 2015 the company plans to invest 8000 $ 900 million worldwide and analysts expect similar amounts for subsequent years, increasingly focused on Europe.
"We can expect infrastructure investments and purchases of small operators in these markets due to the leverage (less than 2 times its net debt / EBITDA) of the company," said Fernando Bolaños, analyst at Monex.
In 2014, Telekom Austria America Movil generated sales of 37 thousand 392 million pesos, equivalent to 4.4 percent of its consolidated revenues.
The market in Eastern Europe has great potential profitability compared to Mexico. At the end of the first quarter of 2015, the EBITDA of the company in Mexico margin was 32 percent, versus 14 percent in Eastern Europe.
America Movil May Buy More Cos. in Europe, CFO Says: Financiero
2015-06-16 11:55:25.488 GMT
By Karen Eeuwens
(Bloomberg) -- Click here for original story in Spanish.
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2015-06-16 11:55:25.488 GMT
By Karen Eeuwens
(Bloomberg) -- Click here for original story in Spanish.
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Karen Eeuwens in Sao Paulo at +55-11-2395-9064 or
keeuwens@bloomberg.net
To contact the editor responsible for this story:
Giulia Camillo at +55-11-2395-9177 or
gcamillo@bloomberg.net