America Movil Trims 2024 Capex to $7 Billion on Less Spectrum Spend

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10 months ago

America Movil Trims 2024 Capex to $7 Billion on Less Spectrum Spend

MEXICO CITY (Reuters) – Mexican telecommunications giant America Movil (NYSE:AMX) announced on Wednesday its anticipation of reduced capital expenditure to approximately $7 billion for the year 2024, following years of significant investment in acquiring spectrum and upgrading its network infrastructure. This represents a decrease from the $8.6 billion spent in 2023.

During a call with analysts, America Movil’s finance chief, Carlos Garcia, attributed the reduced capex to substantial prior investments in wireless infrastructure. Garcia highlighted that the company’s major spectrum expenditure this year is expected to occur in Ecuador.

“We’re in very good shape right now with all the investments we have been doing in the last three, last five years,” Garcia affirmed. “We’re going to reduce this year to $7 billion for capex … we’re still going to be growing in every country in Latin America and Europe, and developing fiber and growing also in 5G,” he added.

America Movil, controlled by the family of Mexican tycoon Carlos Slim, reported a net profit of over $1 billion in its fourth-quarter results, surpassing expectations. Despite facing challenges such as a stronger peso affecting overseas revenue and high inflation in Argentina, the company remains optimistic about its financial outlook.

The capex adjustments are expected to facilitate improved budget allocation for America Movil’s broadband operations, Garcia explained. He noted positive customer response to bundled internet packages with streaming platform memberships.

Executives expressed expectations for regulatory changes in Mexico, hoping for deregulation of measures that have previously hindered the company’s expansion, particularly in the pay-TV market.

“I don’t think they should regulate more … we expect that they deregulate some of the measures,” Garcia stated.

While acknowledging regulatory challenges in Colombia, Garcia affirmed that America Movil will uphold its investments in the country. The Claro subsidiary plans to allocate $1.11 billion this year to enhance services and deploy 5G coverage.

America Movil intends to retain its stake in Telekom Austria (OTC:TKAGY), which was increased to 58% in November of the previous year. Executives anticipate further growth opportunities in the European market.

Market-share gains in Brazil have positioned America Movil favorably, with Garcia indicating a willingness to adjust prices upwards if market conditions permit.

The telecommunications landscape in Latin America and Europe continues to evolve, and America Movil remains committed to strategic investments aimed at enhancing its services and expanding its footprint across regions. With prudent capital allocation and a focus on innovation, the company aims to maintain its competitive edge in an increasingly dynamic industry landscape.

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