America Movil

America Movil's rapid rate of expansion throughout Latin America has helped its owner, Carlos Slim Helu, obtain a prominent seat at the table of world's super rich.


May 19, 2008

9 Min Read
America Movil
Company profile: America Movil

America Movil’s rapid rate of expansion throughout Latin America has helped its owner, Carlos Slim Helu, obtain a prominent seat at the table of world’s super rich.

Some emerging market carriers have benefited by originating in and dominating massive home territories, others have grown scale by operating in markets that offered challenging returns to carriers fighting for position in wealthier, more familiar climes, while some Middle Eastern carriers are expanding now thanks to sheer financial clout. America Movil enlarged its footprint through canny acquisition, buying lucrative, undervalued operations, usually from ‘Western’ carriers operating in Latin America who needed to finance battles at home. A similar strategy was employed by Telefonica Moviles and has rendered Latin America something of a two horse race.

The company was formed in its current guise in September 2000 as the result of a spin-off from Telmex (Telefonos de Mexico), Mexico’s largest provider of local and long distance telephone services. At that time, America Movil had operations in Mexico, Guatemala, Ecuador and the US and was serving just over ten million customers.

Many companies in South America found themselves with mounting debts, and were ripe for acquisition at the time of the telecoms crash. Thanks to a healthy position in its Mexican homeland, along with the deep pockets of owner Carlos Slim Helu, America Movil was able to take advantage with some astute purchases. Since its inception America Movil has invested $16bn across its operations.

America Movil now operates in 17 countries and, as of March this year, had a total base of 159.2 million, mainly prepaid subscribers. The carrier has enjoyed strong subscriber growth over recent years and has increased its market share in the region from the about 20 per cent in 2000 to nearly than 50 per cent in 2007.

Fernanda Veiga, senior analyst at Ovum, suggests that the firm’s customer acquisition strategy has been based on high handset subsidies, which pushed down the overall EBITDA margin in the past years. Nevertheless, the group’s consolidated EBITDA margin reached 41.7 per cent in Q108, pushed up by its strongest unit, Mexico (52.1 per cent). At the opposite extreme, the EBITDA figure for its Chilean subsidiary was only 2.3 per cent in the same period.

In the first quarter of 2008 America Movil added 5.7 million subscribers. The group aims to add an extra 20 million customers to its mobile customer base in 2008 and its senior management has even mentioned that the group is considering expanding to a outside of Latin America. “It is likely that America Movil will expand outside its region, as the group has the capital to fund the expansion as well as the know-how to run subsidiaries with different regulatory scenarios,” Veiga told’s sister publication MCI.

At the time of the spin-off in 2000, penetration was at 13 per cent in Latin America. Today, according to Informa Telecoms & Media, it has exceeded 70 per cent.

There has been a downward trend in airtime prices in all of the markets in which America Movil operates. However, the firm says traffic has responded strongly to the lower prices. Consolidated revenues totalled Peso81.3bn ($7.7bn) in the first quarter of this year, expanding by 20.6 per cent year-on-year, with service revenues growing at the same pace in spite of the reduction in interconnection rates that took effect on January 1st in Mexico and Colombia (11 per cent and 50 per cent respectively).

At Peso33.9bn, EBITDA was up 17.8 per cent relative to the same period a year before. The firm’s EBITDA margin came in at 41.7 per cent, holding firm in spite of the marketing expenses and opex associated with the launch and promotion of the carrier’s 3G services recently launched in nine countries (Argentina, Brazil, Chile, Colombia, El Salvador, Honduras, Mexico, Paraguay and Uruguay). Ovum perceives that the group is aiming to increase its contract customer base – especially with SMEs – and therefore increase its overall ARPU as customers spend more on non-voice services.

The company’s operating profits in the first quarter of this year totalled Peso23.8bn and represented just under 30 per cent of revenues.

America Movil is of course headed by Carlos Slim, who last March was judged as the “world’s second richest man” by Forbes magazine. Slim’s estimated fortune soared to $68bn.

Latin American regulators have not enjoyed watching the rich get richer. In August 2007, Eduardo Perez Motta, president of Mexico’s Federal Competition Commission, announced an investigation into the alleged market dominance of America Movil and its sister landline company Telcel. The regulator could use Mexico’s Federal Competition Law and Federal Telecommunications Law as the basis for forging an asymmetric regulatory scheme aimed at reducing the market control wielded by Slim’s telecommunications operations.

America Movil faces a tough challenge in Ecuador. The regulator, Conatel, has rejected the carrier’s third offer to renew its mobile licence. The company, operating under the brand name Porta, will be offering mobile services until end of August.

“Conatel’s head Jaime Guerrero said that Porta’s economic offer was not convenient for the state, but the offer value was not disclosed yet,” Veiga told MCI. “We wonder how much Porta offered to pay for the renew of its mobile licence. Non-official sources say that the total offer was around $307m.” Ovum believes that the Ecuadorean government was expecting an offer around $550m as Movistar just paid $220m for the renew of its mobile licence in mid-April.

Further, regulators in Colombia announced fines in July 2007 for alleged price fixing by America Movil’s Comcel operation, which controls some 65 per cent of the market, and Telefonica’s Movistar. More problems lurk in Uruguay, where incumbent Antel has recently accused America Movil’s local unit, CTI Movil, of fraudulent commercial activity and misleading advertising related to an aggressive marketing campaign.

Presenting other conundrums for America Movil is Venezuelan President Hugo Chavez. Not only did he block the operator’s planned takeover of CANTV when he nationalised the telco, Chavez has also reportedly sent a team of telecommunications specialists to Nicaragua, where President Daniel Ortega is on board to create a mobile operator run by the two nations in competition against America Movil’s Claro-branded network, which is Nicaragua’s dominant operator.

In addition, America Movil faces renewed competition from Spain’s Telefonica, which acquired the Latin American assets of BellSouth for $5.9bn in 2004 and now derives 35 per cent of its revenue from its Latin American operations.

Vivo, Brazil’s top operator, owned by Telefonica and Portugal Telecom, agreed to buy regional providers Telemig and Amazonia Celular for around $600m. However, Vivo decided to sell Amazonia Celular to another Brazilian mobile operator, Oi. The deal would give Vivo a one-third market share in the country if approved by regulators and the judiciary.

America Movil’s rise to the top offers one of the finest examples of an operator using financial strength gained in emerging markets to muscle its way onto the world stage. It would be inaccurate to describe Slim’s fortunes as a rags-to-riches tale, but America Movil’s success story is impressive nevertheless. The firm is the largest privately held company in Latin America with a market valuation that has grown more than ten times since 2002. It’s onwards and upwards for America Movil.

America Movil – an acquisitive company history


When America Movil began operations as an independent company in September 2000, it was serving 8.9 million subscribers throughout Mexico. Today, America Movil is Mexico’s largest provider of wireless telecommunications services and serves 50 million subscribers – nearly 35 per cent of America Movil’s total subscriber base.


Shortly after its spin-off from Telmex, America Movil entered the Brazilian market through its 44 per cent participation in Telecom Americas, a JV established with Bell Canada International and SBC. In April of 2001 America Movil expanded its presence in Brazil by acquiring 100 per cent of Tess and controlling interests in Telet and Americel. In July 2002 the company further strengthened its position in the market by acquiring a controlling interest in Telecom Americas, as well as completing the acquisition of ATL. Now one of Brazil’s largest providers of wireless communications services, America Movil serves about 30.2 million subscribers.

United States

At the time of its spin-off in 2000 America Movil was operating in the US through its subsidiary Tracfone and was serving around 700,000 prepaid customers. Tracfone operates an MVNO and offer nationwide service for its customers by virtue of its agreements with major US wireless carriers. In 2004 Tracfone began selling GSM handhelds online and through major US retailers. The company now serves 9.5 million customers throughout the US.


In October 2003 America Movil acquired a controlling interest in CTI and in November of the same year increase its interest to 92 per cent. At the time of the initial acquisition, CTI had 1.3 million subscribers, America Movil now serves more than 14.6 million subscribers throughout the region.


America Movil first entered the Colombia market in 2000 through its participation in Telecom Americas and in February 2000 acquired controlling interests in Comcel and Occel, which together had 2.5 million subscribers. Through its acquisition of Celcaribe in early 2003, Amerca Movil was able to provide nationwide coverage to its subscribers. It now serves 22.3 million subscribers throughout Colombia.

Central America

Through its operations in Central America-encompassing Guatemala, El Salvador, Nicaragua and Honduras, America Movil serves 8.2 million wireless subscribers and customers through more than 2.1 million fixed lines.


Since its spin off in 2000, America Movil has grown its subscriber base in Ecuador from 230,000 to 6.9 million. However, Amercia Movil looks set to withdraw services in August as the goverment has rejected the carrier’s new licence.


In August 2005 America Movil acquired TIM Peru for ?472m. At the end of Q108 the firm had over seven million subscribers. Peru had the highest per cent mobile growth in Latin America in 2007 and this trend is widely expected to continue throughout 2008.

The Caribbean

In December 2006, America Movil acquired from Verizon Communicaitons a 100 per cent ownership in Verizon Dominicana, initiating operations in the Caribbean. During 2007, America Movil acquired Telecomunicaciones de Puerto Rico in March and in November completed the acquisition of 100 per cent of the shares of capital stock of Oceanic Digital Jamaica. Today America Movil serves through its operations in the Caribbean 3.5 million wireless subscribers and more than 1.3 million fixed lines.

About the Author(s)

Get the latest news straight to your inbox.
Register for the newsletter here.

You May Also Like