Telecoms reform "can be positive" says América Móvil CFO
Mexico's reforms - which have banks and buyers lining up for asset sales from América Móvil - could have a silver living for the Slim family's company, says CFO Carlos García Moreno
América Móvil's chief financial officer Carlos
García Moreno has said Mexico's sweeping telecoms reform
- which has prompted the company to divest assets to lower its
domestic market share - could prove a boon for the telecoms
|| Photo source: Matthew Hurst
"We think the reform can be very positive," he told
LatinFinance in an interview. "I think there are
opportunities in the telecom law," he said, adding that the
reform brings a more up-to-date legal framework to the sector
after more than decade of inertia.
His comments come as potential buyers line up to pitch for
América Móvil's assets and as banks seek advisory
roles on the planned divestments.
"Already we're beginning to get signs of interest from many
quarters, including many unexpected ones," García Moreno
discussing the shape that the asset sales might take.
Mexican regulators earlier this year declared América
Móvil, controlled by the Slim family, a "preponderant
economic agent" in the local telecoms market. New laws impose
asymmetric regulation, such as different connection rates, on
América Móvil announced in July that it would
sell assets to reduce its market share in landlines and mobile
subscribers to below 50%.
Ending the impasse
Asked whether the firm was a winner or a loser from the
reform, García Moreno said asset sales would be
"neutral" because the board of directors stipulated a
divestment must be at market prices. The uniqueness of the
opportunity for potential buyers made a sale at market prices
highly achievable, García Moreno said.
Once the firm is no longer classed as dominant in the
market, América Móvil should be able to get a
license for its long-held ambition to provide its clients pay
television, García Moreno said. The firm had been barred
from pay TV under regulation dating back to an initial
telephone concession granted in 1990.
"There was a bit of an impasse," under the previous
framework, he said. Technology has evolved since the 1990s,
making it possible for telecoms firms to provide television and
phone lines using the same infrastructure, said García
Moreno. He noted that pay TV is an "integral part" of
América Móvil's business in its operations
Under the new framework, América Móvil is
still barred from pay TV if it remains dominant in the wider
"To the extent that we cease to be a preponderant player,
and not subject to asymmetric regulation, that does away with
regulatory uncertainty and clears the way for us to move into
pay TV," he said, discussing the benefits of the reform.
Meanwhile, a decision to spin-off the firm's Mexican
telecoms towers into an independent entity - which he said
would be listed, and owned by the same shareholders on a
share-for-share basis - will also benefit shareholders, as the
towers can be rented out to new competitors.
"If there are more players using the same towers, you get
more revenue out of them," he said. As such, he said the towers
would have a higher market value: "They will be assigned a
higher multiple, so our current shareholders will extract more
"What we want is to extract more value from assets that we
have buried in our balance sheet, at cost."
Buyers, banks line up for AMX asset sales