América Móvil Q1 2025 Earnings Report

América Móvil EPS Results

• Actual EPS: $0.30
• Consensus EPS: $0.32
• Beat/Miss: Missed by -$0.02
• One Year Ago EPS: N/A

América Móvil Revenue Results

• Actual Revenue: $11.36 billion
• Expected Revenue: $11.28 billion
• Beat/Miss: Beat by +$76.14 million
• YoY Revenue Growth: N/A

América Móvil Announcement Details

• Quarter: Q1 2025
• Date: 4/30/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 30, 2025
• Conference Call Time: 11:00AM ET

América Móvil (NYSE:AMX) provides telecommunications services in Latin America and internationally. The company offers wireless and fixed voice services, including airtime, local, domestic, and international long-distance services; and network interconnection services. It provides data services, such as data centers, data administration, and hosting services to residential and corporate clients; value-added services, including Internet access, messaging and other wireless entertainment, and corporate services; data transmission, email services, instant messaging, content streaming, and interactive applications; and wireless security services, mobile payment solutions, machine-to-machine services, mobile banking, virtual private network services, and video calls and personal communications services. In addition, the company offers residential broadband services; IT solutions to small businesses and large corporations; and cable and satellite television subscriptions. Further, it sells equipment, accessories, and computers; and offers telephone directories, wireless security, call center, advertising, media, and software development services. Additionally, the company provides video, audio, and other media content through the Internet directly from the content provider to the end user. It sells its products and services under the Telcel, Telmex Infinitum, and A1 brands through a network of retailers and service centers to retail customers; and through sales force to corporate customers. The company was incorporated in 2000 and is based in Mexico City, Mexico.

América Móvil Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Good morning.

[Operator]

My name is Nadia, and I'll be your conference operator today. At this time, I would like to welcome everyone to the American Mobile First Quarter twenty twenty five Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Now I will turn the call over to Ms.

[Operator]

Daniella Lecquana, Head of Investor Relations.

[Daniela Lecuona, Investor Relations at América Móvil]

Thank you. Good morning, everyone. Thank you for joining us today to discuss our first quarter twenty twenty five financial and operating results. We have on the line Mr. Daniel Hajj, CEO Mr.

[Daniela Lecuona, Investor Relations at América Móvil]

Carlos Garcia Moreno, CFO and Mr. Oscar Gonzalez, COO.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Thank you, Daniela. Welcome everyone to the first quarter of twenty twenty five financial and operating report. Carlos is going to make a summary of the results. Thank you.

[Carlos García Moreno Elizondo, CFO at América Móvil]

Thank you, Daniel. Good morning, everyone. Well, the first quarter of the year began going to surge in ahead, continuing the trend from early December as the market grew increasingly concerned with inflation on signs of a much stronger economy than had been expected. However, as inflation numbers came in within expectations and new payroll figures weakened, ten year treasury yields came down by a remarkable 50 basis points from the January at 4.2%. In the period, most currencies in our region of operations appreciated versus the U.

[Carlos García Moreno Elizondo, CFO at América Móvil]

Dollar, but not in Mexican peso, which remained almost flat over the quarter as the uncertainty of a potential new tariffs by The U. S. Weighed on it. In the quarter, the U. S.

[Carlos García Moreno Elizondo, CFO at América Móvil]

Dollar lost 7.3% versus the Brazilian real, 4 point 9 percent versus the Colombian peso, 4 point 4 percent versus the Chilean peso and 4.2% versus the euro. Now, the Mexican economy has been slowing down since April of last year, with the index of economic activity reaching 0% in February of this year and private consumption, as you can see in the slide that we are showing, has plummeted and is now declining 1% year on year on the back of uncertainty around the Mexican and then the U. S. Election, increasing real rates of interest as inflation declined, but rates stayed put and the decline of economic activity made worse by a significant tightening of public expenditures. So as you can see, there's been really a vertical drop in private consumption in Mexico over the last several months to a point that is now negative.

[Carlos García Moreno Elizondo, CFO at América Móvil]

Now in the first quarter, we added 2,400,000 postpaid subscribers with Brazil leading the way with 987,000 clients, followed by Colombia with 163,000 and Mexico with 133,000. In the prepaid segment, we posted $1,000,000 net prepaid losses at both Mexico and Brazil disconnected clients $831,000 and $545,000 respectively, while Argentina added 230,000 trucks and Colombia added 134,000 trucks. So prepaid disconnections were limited to Brazil and Mexico. In the fixed line segment, we connected 446,000 new broadband accesses. Mexico was the main contributor with 165,000 clients, followed by Brazil with 98,000 and Central America with 52,000.

[Carlos García Moreno Elizondo, CFO at América Móvil]

Both lines and pay TV units fell by 162,000 respectively. Mobile postpaid and fixed broadband were the main drivers of growth of our client base, increasing by six point one percent and four point three percent respectively. Again, you can see this in this slide. Our first quarter revenue was up 14.1% year on year in Mexican peso terms to MXN $232,000,000 with service revenue expanding 15.8% and adjusted EBITDA 13.3. The latter figures partly reflect the year over year appreciation of most currencies versus the Mexican peso, particularly the Colombian and Chilean pesos, which were up 1814% versus the Mexican peso, The dollar, which was up 17.7% and the euro up 14.1%, again, versus the peso.

[Carlos García Moreno Elizondo, CFO at América Móvil]

So that essentially means that with the exception really of Brazil, all other international operations of American Mobility were worth more in Mexican peso terms. At constant exchange rates, when we adjust to these exchange rate movements, service revenue increased 6.1 and adjusted EBITDA 4%, adjusted for certain tower sales by Telmex a year before. Most of our operations saw the EBITDA margins increased sequentially. Our wireless service revenue climbed to 5.7%, decelerating somewhat from the prior quarter as prepaid revenue continued to slow down mostly on account of weaker economic activity in Mexico as we've seen before. Posted revenue growth remained fairly stable across the board and actually accelerated slightly to 8.8% when our Chilean operation is included.

[Carlos García Moreno Elizondo, CFO at América Móvil]

On the fixed line platform, service revenue growth came in at 6.7% with corporate networks revenue appearing to slow down. These effects had mostly to do with the fact that in the year earlier quarter, that line item has had a very strong showing. You can see this again in this slide. Broadband revenue growth maintained its pace at 9.8%, while that of PayTV came in at 8.7%, the fastest pace seen in many quarters, reflecting on the one hand the incorporation of Chile, but also better growth in Central America and Austria and Eastern Europe. And we are seeing less of our drag in Brazil, where although growth is still negative, the rate of decline has slowed.

[Carlos García Moreno Elizondo, CFO at América Móvil]

The Central America and Eastern European blocks were top performers in the period, exceeding faster service revenue growth in both the fixed and the wireless platforms and they have cut the preceding quarter. Our first quarter operating profit totaled 44,800,000,000.0, a 10% year on year increase after depreciation and amortization charges that were up 16%, which partly reflects the incorporation of our Chilean operation. With our comprehensive financing cost decreasing slightly from the year earlier quarter, our net income was up 38% to MXN18.7 billion and was equivalent to MXN0.31 per share, 30 per ADR. Our net debt March stood at MXN 500,000,000, not including capitalized lease obligations. It was equivalent to 1.5 times last twelve months EBITDA.

[Carlos García Moreno Elizondo, CFO at América Móvil]

In cash flow terms, our net debt increased ARS 11,000,000,000 in the quarter and it helped us fund capital expenditures in the amount of ARS 25,000,000,000, share buybacks of ARS 4,000,000,000 and ARS 7,000,000,000 in labor obligations. So that's the summary, and I will pass the floor back to Daniel so that we can begin the Q and A session. Thank you all.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Thank you, Carlos. We can start with the Q and A session.

[Operator]

The first question goes to Leonardo Almos of UBS. Leonardo, please go ahead.

[Leonardo Olmos, Executive Director at UBS Group]

Hi, everyone. Good morning. My question is going to be centered on regulation and laws in Mexico. So I think what we're seeing now is unprecedented maybe for many, many years. If you could first discuss the new telecommunications law or legislation that could impact the spectrum distribution and what's your positioning on it?

[Leonardo Olmos, Executive Director at UBS Group]

So potentially regarding spectrum to your competitors, to new competitors? And second, if what the Trump administration is proposing on the Liberation Day, if there is any type of impact from Mexico because there was a document that by that date they released mentioning that they were concerned, the U. S. Government was concerned about concentration, high concentration of market share in telecommunications in Mexico, if that could be a concern to you? Thank you.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Thank you. As we as you know and everybody knows, Congress is currently discussing the proposals made by the President, Schoenbaum. Regarding the new telecommunication law and some changes in the competition law. Those are right now discussing in the Congress. We are monitoring closely both proposals and providing comments to abuse to the Congress people, okay?

[Daniel Hajj Aboumrad, CEO at América Móvil]

So that's what we have now. We don't have anything else. Everybody knows what is what the proposals have. I agree on what you're saying about the spectrum. So we are giving our views and we can discuss that on more detail when both laws has been enacted, enacted, okay?

[Daniel Hajj Aboumrad, CEO at América Móvil]

So but right now nothing to say. The laws are there. Everybody is discussing. We're giving our points of view. And that's all.

[Daniel Hajj Aboumrad, CEO at América Móvil]

So I think in the next two months, as the President said, they are going to be enacted. So that's what we have right now. The other side, understand what you said about President Trump about. But if you're saying about the competition and dominance and all of that, well, that will be included in this loss and this loss has been discussing right now. So other important issue and we put it in front of the first page of our results is the market share that we have in fixed broadband and TV.

[Daniel Hajj Aboumrad, CEO at América Móvil]

We have 27% and CellCel has 55%. So does not include the CPE that has also some subscribers. So I think we are discussing that. We are we think that we are not the dominant player anymore and that the loss has to show that. So that's mainly what we have been discussing.

[Leonardo Olmos, Executive Director at UBS Group]

Crystal clear. Thank you very much. Have a good day.

[Carlos García Moreno Elizondo, CFO at América Móvil]

Thank you.

[Operator]

The next question goes to Walter Piecyk of LightShed. Walter, please go ahead.

[Walt Piecyk, Partner at LightShed Partners]

Thanks. I think can you just address the impact of tariffs potentially on handsets? How do you expect to if anything,

[Walt Piecyk, Partner at LightShed Partners]

how would that impact your business?

[Leonardo Olmos, Executive Director at UBS Group]

You hear me?

[Walt Piecyk, Partner at LightShed Partners]

Sorry.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Well, the tariffs in Mexico, we no changes on tariff on handsets right now in Mexico and Latin America. I don't know that if we can have something in the future. So at this moment, even it's being a little bit better because the exchange rate starts coming a little bit down and those are we buy everything in dollars. So in Mexico, let's say, of handsets has been better. So at this moment, we don't have anything on tariffs and we don't expect anything on tariffs for the next months.

[Walt Piecyk, Partner at LightShed Partners]

Yes. Sorry, was going to continue just kind of noting perhaps the trade deficit that exists between Mexico and China. And if there's anything perhaps given everything that's happening in the world and how manufacturing can move to different locations, whether that could extend in terms of Mexico's relationship with China?

[Daniel Hajj Aboumrad, CEO at América Móvil]

Well, I think there's big discussions on that on the trade deficit, trade deficit in The U. S, trade deficit in Mexico with China. So it's going to be very difficult to understand what is going to happen in the future. But I think that Mexico will have a very in my view, a good probability that there will be everyday manufacture more and more in Mexico to go to The U. S.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Manufacturing more with Mexicans and doing things in Mexico, not importing from other countries and then exporting to The U. S, I think that's going to change a little bit. But if we produce here, I think Mexico will have a good opportunity to grow. So I think all these discussions and what is happening in the world, I hope that will be benefit for Mexico.

[Walt Piecyk, Partner at LightShed Partners]

Thanks. Carlos also obviously mentioned and we've seen the results, the impact of some of the economic issues in terms of consumer demand, I guess, in Mexico. I mean, you guys have both been there a very long time. And obviously, Carlos is very involved in Mexico in general, even before Mobile. Just curious, kind of your thoughts on timeline and how long you think that this will progress through your numbers, how deep of a dip, How soon of a recovery, I suppose?

[Carlos García Moreno Elizondo, CFO at América Móvil]

See, what the right. I think what I was saying before is we

[Carlos García Moreno Elizondo, CFO at América Móvil]

had,

[Carlos García Moreno Elizondo, CFO at América Móvil]

let's say, an extraordinary situation last year second half of last year because of the confluence of many events. One was the election in Mexico, which always lead to a slowdown in economic activity for the most after the election and beginning of the new administration. That's our historical pattern. Then you had we had also the elections in The U. S.

[Carlos García Moreno Elizondo, CFO at América Móvil]

At this time was probably more eventful than probably has been expected in some more times. And we had, as Harry mentioned, very high and increasing real rates of interest because policy rates were constant, but inflation was declining rapidly. So the real rates of interest were going up and that obviously had an impact on overall spending, both consumption and investment. And then to make things somehow worse in some extent just in terms of economic activity in the short term. The new administration came in with a clear commitment to put order in public finances, which meant reducing the fiscal deficit.

[Carlos García Moreno Elizondo, CFO at América Móvil]

And these they've been doing with a lot of steel. We've seen the numbers through fellows this year, and they are doing better than budget. You have a primary surplus that has increased significantly, not compared to last year, but even two years before. And the financial deficit is even lower in after inflation in terms of the year than it was two years ago, not to mention last year. So but our view is that these effects all these three effects that I have mentioned are going away.

[Carlos García Moreno Elizondo, CFO at América Móvil]

Obviously, there's the elections have happened and the uncertainty around the tariffs, I think, will be clearing relatively soon. The real policy rates are coming down in Mexico. They have been coming down, and we expect them to continue to come down. So real rates of interest are now beginning to go down. And we expect that the government will be in a position in the second half of the year to be a bit more forthcoming with their expenditures.

[Carlos García Moreno Elizondo, CFO at América Móvil]

So I think that our current expectation is that we are seeing the bottom right now in this first quarter. And we would expect to see this probably the bottom and we can expect to see recovery of sorts second half of the year. If there's a lot of people that believe that the USMCA agreement may be negotiated early, as earlier this year. And to the extent that's the case, I think that it will provide an additional boost to the economy, as Daniel has been saying. And so yes, we think we are quite positive on our expectations for the second half of the year.

[Carlos García Moreno Elizondo, CFO at América Móvil]

I think we are seeing the

[Walt Piecyk, Partner at LightShed Partners]

bottom That's very helpful, Carlos, thank you also, Daniel. Appreciate it.

[Leonardo Olmos, Executive Director at UBS Group]

Thanks. Thank you, Wallace.

[Operator]

The next question goes to Marcelo Santos of JPMorgan. Marcelo, please go ahead.

[Marcelo Santos, Equity Analyst at JP Morgan]

Hi, good morning, Daniel, Carlos, Oscar, Daniela. Thanks for taking my questions. I have two. The first is regarding Mexican prepaid. I understand in the release you attributed the weakness mostly to the economy, but I would like to see if you could discuss a bit the competitive angle.

[Marcelo Santos, Equity Analyst at JP Morgan]

We are seeing some MVNOs growing very aggressively in prepaid. Do you think this is affecting? What could you discuss of the competitive angle on prepaid in Mexico? And the second question is regarding the appetite of America Movers for M and A in the region. There are some players that divesting some assets and wanted to know what do you think about that?

[Marcelo Santos, Equity Analyst at JP Morgan]

Thank you very much.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Well, let's talk about Mexico. First, want to we already we talked a little bit about broadband and postpaid. I think in Mexico, we have a very good month on broadband quarter, sorry, on the broadband and on postpaid. I think we are doing good. People is consuming more.

[Daniel Hajj Aboumrad, CEO at América Móvil]

ARPU is going up in postpaid. And in broadband, we're still gaining subscribers and moving to fiber and doing so. I think when you talk about broadband fixed and postpaid, we're doing okay in Mexico. And when you talk a little bit about prepaid that I think is the concern that I have been reading this morning is, well, first and not the only thing is the slowdown of the economy in Mexico. I think that's the first thing.

[Daniel Hajj Aboumrad, CEO at América Móvil]

You see that the ARPU is declining a little bit and the ARPU is declining because our consumers are spending a little bit less than they used to be when it's prepaid is really tied to the economy. So when things are good, people consume more ARPU grows. When things are not so good, a slowdown then people are consuming a little bit less. In the other side, we have a very aggressive competition in promotions of some MVNOs like BiTE is very aggressive and they are growing. The difference is that, well, they have an ARPU of 38 and we're having an ARPU of MXN 1 70 7.

[Daniel Hajj Aboumrad, CEO at América Móvil]

So the difference between their subscribers and our subscribers is maybe three, four times difference on that. So we have been having and looking and our strategy is to look for good prepare all of them are good. Maybe what is happening is that their subscribers or the promotions that the market and they are having are so aggressive that they just want to not recharging, give service for free. And that's an issue and I hope that will solve in the future, but they have been doing that for some time. And the let's see what is going to happen when it starts to move a little bit and take out these promotions.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Other sign that I see this quarter is in number portability. They have been gaining in number portability, let's say, the same. But what I see in the numbers, but losing more subscribers in number portability. So number portability has been not so good as they used to be last year. So subscribers when they start to move with their promotions then they are going to decide in which other company they are going to use.

[Daniel Hajj Aboumrad, CEO at América Móvil]

So what the only thing is we're focusing in very good and the better on the highest ARPU customers in prepaid and in postpaid.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Our

[Daniel Hajj Aboumrad, CEO at América Móvil]

number portability is doing much a little bit better than last year. So I think we are starting to see better numbers on that. And that will be exactly what is happening in Mexico. So big and promotions where people is not paying or paying very low amount of money. And then when they want to recharge, are going to do that.

[Daniel Hajj Aboumrad, CEO at América Móvil]

And when this promotion will end, I think it's going to be interesting how they are going to retain those customers. ARPUs MXN177 in Telcel, MXN38 in the other company. So it's exactly what is happening. It's not only one thing. You have a slowdown plus promotions plus our strategy.

[Daniel Hajj Aboumrad, CEO at América Móvil]

All of that is what is happening here. And another and I want to do another announcement that I have been since the last call that we don't give a guidance for budget for CapEx budget. We have that announcement and the CapEx for this year is going to be lower than last year. It's going to be €6,700,000,000 And it's only because we're seeing slowdown in all the economies, a little bit slowdown. We have been investing a lot, moving a lot with five gs.

[Daniel Hajj Aboumrad, CEO at América Móvil]

We have been doing the last three years more fiber, a lot on IT systems. We have a lot all our cloud and data centers all in place. So that give us a chance right now this year with the slowdown that will reduce the CapEx to €6,700,000,000 That is what we decided yesterday in the Board. I feel very comfortable on that and that's what we decide on that.

[Marcelo Santos, Equity Analyst at JP Morgan]

Thank you. And the M and A, do you have any questions?

[Daniel Hajj Aboumrad, CEO at América Móvil]

On the M and A, well, we're open to M and A, I think, will be a little bit difficult that in the region, we'll have something alone. But if you are saying because Telefonica is selling their assets, are aware of that and we're open to see if something fits in America Mobile strategy that we're open to see anything.

[Marcelo Santos, Equity Analyst at JP Morgan]

Perfect. Just on the CapEx, does this change your three year CapEx view? Or is more a relocation of CapEx between the years? Just to understand how this talks with the guidance.

[Daniel Hajj Aboumrad, CEO at América Móvil]

We don't know.

[Daniel Hajj Aboumrad, CEO at América Móvil]

It's going to be very difficult to see what's going to be the CapEx of next year. But I think this year is going to be 6.7%. Next year, difficult to say. But I don't think that it's going to go so high as we predicted. But I don't know depending on the growth, depending on the traffic, depending on a lot of things that we're going to see around this year.

[Marcelo Santos, Equity Analyst at JP Morgan]

Perfect. Thank you very much for the clear answers.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Thank you.

[Operator]

The next question goes to Pani Kanemuri of HSBC. Pani, please go ahead.

[Phani Kanumuri, Analyst at HSBC]

Thank you for taking my questions. So the first question is regarding your corporate network revenues in the fixed segment. Are you seeing some pressure due to the global concerns on growth on the corporate segment revenue? And do you expect the growth rate to continue in this segment? My second question is regarding Colombia.

[Phani Kanumuri, Analyst at HSBC]

The margins have come down year on year as well as quarter on quarter. What is driving the margin decline in Colombia? Thank you.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Well, Albert, I'm going to start in Colombia. I think Colombia is doing much better. Colombia, our service revenue is growing 6% this quarter. Wireless revenue 8.3%. So we're growing and we're growing more.

[Daniel Hajj Aboumrad, CEO at América Móvil]

That's why we're investing a little bit more in growth. And that's the reason why our EBITDA in terms of percentage reduced a little bit, but we grow our EBITDA point 2.4%. So the EBITDA is growing and we are doing good in the market. We are recovering. And I think we're going to have a good year in Colombia.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Twenty Twenty Five is going to be a good year for us. And the other thing in the corporate segment, Oscar can talk a little bit about that. I think we are very strong. We have been investing a lot in salespeople, in apps, in services, in alliances, in our data centers. And it's a very important market, and we're going to continue to be focusing on that.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Sometimes the corporate, but Oscar can talk a little bit about that. Sometimes in the quarter, we gained some big customers. So that's why we grow a little bit more. Other ones is in the other quarter. But all overall, we're focusing in the corporate segment, and we want to grow and be strong on that.

[Daniel Hajj Aboumrad, CEO at América Móvil]

But Oscar can be with more detail.

[Oscar Von Hauske Solís, Chief Fixed Line Operations Officer & Director at América Móvil]

Yes, yes. Thank you. You mentioned, last year, we won a very large project. And now we have a very, very strong pipeline. As you know, with the new conditions and the people is taking more time to get the decisions.

[Oscar Von Hauske Solís, Chief Fixed Line Operations Officer & Director at América Móvil]

But what we see in the pipeline around cloud services, digitalization, data centers, we see a very, very huge pipeline. So we believe that we will catch up through the year. And the people is taking more time to take a decision right now given the economic situation. But the pipeline that we have is very, very strong, as Daniel said.

[Phani Kanumuri, Analyst at HSBC]

Thank you, everyone. It is pretty clear.

[Operator]

The

[Operator]

next question goes to Vitor Tamita of Goldman Sachs. Vitor, please go ahead.

[Vitor Tomita, VP - Equity Research at Goldman Sachs]

Hello, good morning and thanks for taking our We have two questions from our side. The first one is a follow-up on the spend reduction, the reduction in spending by prepaid customers in Mexico. Do you have any visibility on whether customers are simply reducing Internet usage or switching to lower cost competitors to some extent or using Wi Fi a lot more? Just to check if you have any visibility on how people are being able to actually reduce their spending without affecting their daily usage or their daily habits. And the second question from our side, on a similar note also discussing Mexico.

[Vitor Tomita, VP - Equity Research at Goldman Sachs]

Could you give

[Vitor Tomita, VP - Equity Research at Goldman Sachs]

us a bit more of an update on how you are seeing the competitive environment for broadband given the following the good results in broadband this quarter? Thank you very much.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Robert, on the prepaid, what I see and the what I'm looking on the prepaid on the reduction on ARPU because the slowdown on the economies, because people is delaying a little bit the recharge of the phone. You sell a card of fifteen days and sometimes they recharge before because they have all their data finish, sometimes they recharge. Today, they wait a little bit to wait one or two days and then they go and recharge and that give us the reduction on ARPU. So people is delaying a little bit the buying cars and recharging the cars. It's what I see is and it's what is happening right now.

[Daniel Hajj Aboumrad, CEO at América Móvil]

On the broadband, we're going to be still we're doing good. And we're going to still be aggressive. And as we put more fiber, we're going to change more customers. We have 90% of our customers connected through fiber. And I think we're going to have more loyal customers with fiber, good speed and good prices.

[Daniel Hajj Aboumrad, CEO at América Móvil]

I think we are very aggressive in the market in the broadband. And I think that's what is happening right now.

[Carlos García Moreno Elizondo, CFO at América Móvil]

Just to give you a bit more color

[Carlos García Moreno Elizondo, CFO at América Móvil]

on the prepaid. Because the prepaid ARPU was growing a year ago 4.5%. By the third quarter, it had slowed down to 3.1%, zero point eight % in the fourth and it was minus 2.2% in the first quarter of the year. So this is very much in line with the chart that I showed you with the decline of domestic consumption. That's basically the same timing.

[Carlos García Moreno Elizondo, CFO at América Móvil]

And as Amir said, the whole issue of prepaid, the whole reason for prepaid to exist is that people have more control over their spending. And if they become a bit more cautious, more uncertain about the environment, then they typically reduce their spending. They will have to spend in and out every month as they would with a regular postpaid plan, okay? So that's the beauty of prepaid for the people and they are just spending very rapidly, the first signs of slowdown of the economy.

[Daniel Hajj Aboumrad, CEO at América Móvil]

As I said, this is slowdown of economy and also big promotion for competitions and other ones that It's not only one thing what's happening in Mexico. There's a couple or three things that are that we already explained, and it slips the market is there. So that's I think will be better in the future. I don't know for how long it's going to be so aggressive.

[Daniel Hajj Aboumrad, CEO at América Móvil]

We have the best network. We have very good coverage, the best systems, IP. So with very good quality in the network. So that also counts. It's not only promotions, other things counts also on that.

[Vitor Tomita, VP - Equity Research at Goldman Sachs]

That was very clear. Thank you very much.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Thank you.

[Operator]

You. And the next question goes to Luca Brendam of Bank of America. Luca, please go ahead.

[Lucca Brendim, Equity Research Associate at Bank of America]

Hi, good morning. Thank you for taking my questions. I have two here on my side. The first one, you mentioned a little bit about the recent M and A moves that we saw in Latin America. I just wanted to check if you're already seeing some changes in terms of competition, the competitive environment in any of the regions where we have seen M and A or that we're seeing a lots of conversations about what could be happening?

[Lucca Brendim, Equity Research Associate at Bank of America]

And the second one, now that you have incorporated the Chilean operations, could you give us an update on the strategy for the region? If the main focus will be increasing profitability or what are the main growth drivers that you see for the region? Thank you.

[Daniel Hajj Aboumrad, CEO at América Móvil]

For the region or for Chile?

[Lucca Brendim, Equity Research Associate at Bank of America]

For Chile.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Okay. Well, on the M and A, I think well, understands that M and A brings consolidation. Consolidation is much better for all the markets, okay? So stronger competitors and that will be good for us. I don't think that will be the case of Colombia, let's say, the case of Argentina.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Think consolidation is not bad. On Chile, we have what you said what's the question? If we want to go for profitability or for market share, I think in Chile, we want to go for profitability and for market share. I think still we have not very high market share in the wireless market and we're growing. We're going to grow there.

[Daniel Hajj Aboumrad, CEO at América Móvil]

We're changing the network. We're putting more coverage. We're doing five gs. We're buying spectrum. So we're in prepaid and in postpaid, we're going to be targeting more customers, more market share and try to grow there.

[Daniel Hajj Aboumrad, CEO at América Móvil]

We're still very small in market share. We want to grow. In the broadband, we have also a good strategy. We're giving TV good channels. We have the best TV and we're moving to fiber.

[Daniel Hajj Aboumrad, CEO at América Móvil]

We're moving very fast to fiber and that's being very good for us. Churn has been reduced. So we are having not a six months plan in Chile. We're having a three, five year plan in Chile and that's what we are targeting moving to fiber, putting best network, doing quality, very, very competitive. And the other that Oscar is saying, we still have a long way to go on the synergies.

[Daniel Hajj Aboumrad, CEO at América Móvil]

So merging these the two companies still we still have a lot of synergies to go. So we I'm sure that we're going to grow our market share and I'm sure that we're going to grow our EBITDA margin in the future. So that's what we have in Chile.

[Lucca Brendim, Equity Research Associate at Bank of America]

Very clear. Thank you for the answers.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Thank you.

[Operator]

The next question goes to Carlos De Legarreta of ITAU. Carlos, please go ahead.

[Carlos Legarreta, VP Equity Research at Itau BBA]

Thank you. Good morning. A couple of questions on my end. And hopefully they're not just housekeeping questions. But on Chile, Paraguay and Uruguay that you're reporting together now, you mentioned in the press release that these are pro form a figures for Chile and yet there's a double digit increase in EBITDA, a massive increase in the EBITDA margin.

[Carlos Legarreta, VP Equity Research at Itau BBA]

And we just want to understand what is the nature or what is behind this? Is this is Chile doing much better? Or is there an improvement perhaps in Paraguay and your way? Sort of similar question also in Central America, you also had an outstanding increase in the EBITDA margin, and there's not really a ton of explanation in the press release. So would love to hear your thoughts on that.

[Carlos Legarreta, VP Equity Research at Itau BBA]

Thank you.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Well, first in Central America, you know that we have this concern had given this cyber attack in last year in January, a little bit of February. And the comparison between last year and this year is different. But if you look what we do in fourth quarter and what we're going to have in the third quarter, we have been, as I said, investing very good in Guatemala, buying frequency, doing more coverage five also El Salvador doing more fiber all around Costa Rica doing Honduras, Nicaragua. So all around Central America, we have been investing for the last two, three years, good, strong. And we're seeing good performance in our in the other side, we are being very aggressive on the cost and expenses.

[Daniel Hajj Aboumrad, CEO at América Móvil]

So we have to reduce cost and control expenses. So we are doing good. This quarter is a little bit difficult to compare against last quarter of last year as the same quarter of last year. But you are going to see second quarter with a good comparison and you're going to see very good not the growth that we have right now, but we're going to see very good growth in Central America. I think we're doing good.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Not only Central America, in The Caribbean, we're also doing good. Dominican Republic has been doing good. Also Peru has been growing and gaining market share. Colombia, we're doing very strong. Eastern Europe, we are growing and being gaining also some market share and reducing costs.

[Daniel Hajj Aboumrad, CEO at América Móvil]

So to be honest, all overall in America mobile, we have because all the investments that we have been having for the last five years, four years, all the control of the costs that we're having investing in our people training and doing more on all the corporate side. I think we have a good quarter, a quarter where we're gaining market shares and being good in control cost and EBITDA. So all overall, we're I think in Paraguay also you're talking about Paraguay and Uruguay, we're doing good. I don't know if you want to talk a little bit Oscar, about Paraguay, Uruguay, Chile.

[Oscar Von Hauske Solís, Chief Fixed Line Operations Officer & Director at América Móvil]

I'd like before talking about the actual operations, Paraguay and Uruguay, and just to clear up your thoughts, Carlos, The financial statements do not have Chile on pro form a basis. Financial statements do not have Chile on pro form a basis. Now in the section, Southern Cone, which is the first time that we come up with this section at Southern Cone, we did want to include pro form a so that you could look for your models. From here now on, you could have some basis of what the numbers are, and you can basically come to terms with that, okay? But we would expect that as soon as Argentina ceases to be hyperinflationary, which will probably be as soon as next year, we can group all of the financials and the operating statistics of Argentina, Chile, Paraguay and Uruguay within the same group, okay?

[Oscar Von Hauske Solís, Chief Fixed Line Operations Officer & Director at América Móvil]

So I would expect that we were going to have the combined numbers, again, our financial and operational for Southern Cone beginning next year. This year, we will still have Argentina separate. And just to give you an idea of what things look like for the rest of the group, which is Uruguay, Paraguay and Chile, we are providing for this purpose the pro form a figures. On the operations Sorry,

[Daniel Hajj Aboumrad, CEO at América Móvil]

sorry. Yes, yes, sorry. No, no, please.

[Carlos Legarreta, VP Equity Research at Itau BBA]

Thank you. Just I mean, I know the consolidated P and L just specifically, I mean, can follow-up with Anila. But in the Chile, Paraguay and Norway section, the revenue increase looks like it is pro form a, yet the EBITDA increase is 46%. So that doesn't look pro form a. So either there's an inconsistency or there was, like I said, perhaps a massive improvement in the profitability.

[Oscar Von Hauske Solís, Chief Fixed Line Operations Officer & Director at América Móvil]

No, Carlos, it is pro form a. Is pro form a in peso, think, bottom of the table.

[Carlos Legarreta, VP Equity Research at Itau BBA]

Right. So if it's not an inorganic effect, what is the driver behind the margin increase?

[Daniel Hajj Aboumrad, CEO at América Móvil]

We did have just to tell you, one year ago, the EBITDA wasn't so good. We have been growing our EBITDA margin in Chile. The question is because of the EBITDA margin. It's pro form a, but we are growing very good our margins because all the synergies that we're having in Chile. That's what is happening.

[Daniel Hajj Aboumrad, CEO at América Móvil]

If you that's really that answers your question. We are having a very good EBITDA and growing our EBITDA in Chile, and Chile is doing good. And the synergies are working very good. And against last year, we spent a lot of money. We take out some people.

[Daniel Hajj Aboumrad, CEO at América Móvil]

We reduce some costs that we have and content cost, a lot of all the synergies, yes, maintenance costs, the new network as we're saving some money with the new network. So yes, that goes directly to our EBITDA numbers.

[Carlos Legarreta, VP Equity Research at Itau BBA]

That's great. That's exactly the question. I appreciate it.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Yes. Okay.

[Operator]

We have a follow-up from Vitor Tomeeta of Goldman Sachs. Vitor, please go ahead.

[Vitor Tomita, VP - Equity Research at Goldman Sachs]

Hi. Just a very quick follow-up on the new CapEx guidance. Back in the previous earnings call, it was mentioned that there could be some additional CapEx for Chile. Does this new guidance already include what you plan to invest in Chile? Or is it separate?

[Vitor Tomita, VP - Equity Research at Goldman Sachs]

Thank you.

[Carlos García Moreno Elizondo, CFO at América Móvil]

No, no, no.

[Daniel Hajj Aboumrad, CEO at América Móvil]

All our CapEx guidance includes all the CapEx of all the companies. So it includes Chile, it includes everything, okay?

[Vitor Tomita, VP - Equity Research at Goldman Sachs]

Perfect. Thank you very We

[Daniel Hajj Aboumrad, CEO at América Móvil]

used to give a CapEx guidance before the three year CapEx guidance. And I think the last question is if we are going to the reduction that we have this year maybe increase it for next year. I don't know. I don't think so, but I don't know. I think the reduction this year will not increase the normal guidance of CapEx for next year?

[Daniel Hajj Aboumrad, CEO at América Móvil]

I don't know. But we feel that we can save some CapEx for the future.

[Vitor Tomita, VP - Equity Research at Goldman Sachs]

Clear. Thank you very much.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Thank you.

[Operator]

Thank you. We have no further questions. I'll hand back to Mr. Daniel Hash for any closing comments.

[Daniel Hajj Aboumrad, CEO at América Móvil]

Just want to thank everyone for being in the call. Thank you very much.

[Operator]

Thank

[Operator]

you. This concludes today's conference call. You may now disconnect your lines.

Participants

Analysts

• Daniela Lecuona, Investor Relations at América Móvil
• Daniel Hajj Aboumrad, CEO at América Móvil
• Carlos García Moreno Elizondo, CFO at América Móvil
• Leonardo Olmos, Executive Director at UBS Group
• Walt Piecyk, Partner at LightShed Partners
• Marcelo Santos, Equity Analyst at JP Morgan
• Phani Kanumuri, Analyst at HSBC
• Oscar Von Hauske Solís, Chief Fixed Line Operations Officer & Director at América Móvil
• Vitor Tomita, VP - Equity Research at Goldman Sachs
• Lucca Brendim, Equity Research Associate at Bank of America
• Carlos Legarreta, VP Equity Research at Itau BBA