Company Spotlight: America Movil

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Company Spotlight: America Movil

The battle for supremacy of the South America mobile market has intensified after Mexican

mobile operator America Movil SA purchased the number-two ranked mobile operator in Peru. It

is the operator's third purchase in South America in as many months.

America Movil is Latin America's largest mobile operator in terms of customers, and the acquisition of

the Peruvian operator TIM Peru SAC for E407m ($503m) from Telecom Italia SpA, will add at least 1.4

million clients to America Movil's already huge subscriber base of 75 million in the Americas.

America Movil has operations in more than a dozen countries in the region, stretching from the US to

Argentina. It is also thought to be targeting moves into Venezuela, Panama, and Bolivia.

The South American market seems to be mirroring that of western Europe, which is undergoing a wave

of consolidation. Unlike Europe however, there are two regional superpowers battling for supremacy.

Mexico-City based America Movil is owned by Mexican billionaire Carlos Slim, the region's wealthiest

tycoon. His company is locked in an intense battle with Spain's Telefonica SA. The sheer size and

domination of these two players is putting the squeeze on the region's third-placed operator Telecom

Italia.

Telecom Italia, which still has businesses in Brazil, Argentina, Cuba, Bolivia, and Paraguay, could be the

last major international telephone company to leave Latin America. The South American market used to

have a number of foreign telecommunication companies including Verizon Communications, BellSouth

Corp, and AT&T. However, these giants have pulled out of Latin America in recent years in order to

refocus on their domestic markets.

The sale of its Peruvian unit is the second divestiture in South America this year by Telecom Italia,

which will gain E110m ($136m) and reduce debt by about E400m ($494m). In March, Telecom Italia

sold control of its Chilean unit to a local company for E716m ($885m) in cash.

America Movil also recently paid $472m for the number-three-ranked Chilean operator Smartcom SA

from Spanish company Endesa Participadas SA. Smartcom added approximately 1.7 million wireless

subscribers to America Movil's 75 million customers. In July, America Movil closed the acquisition of

Hutchison Telecommunications Paraguay SA.

Business Description

America Movil is a provider of wireless communication services in Mexico and Latin America. The

company operates through its subsidiary Radiomovil Dipsa, which operates under the trade name

'Telcel'.

The company provides cellular telecommunications service in all nine regions in Mexico, including all

major cities. America Movil generates its revenues through five sources: usage charges, monthly

rentals, long-distance, other services, and though the sale of handsets and accessories. The company

also operates though its subsidiaries and joint ventures in the telecommunications sector in Guatemala,

Ecuador, Argentine, Brazil, Colombia, Venezuela, the US, Mexico and Spain.

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America Movil's list of subsidiaries and affiliates include wireless providers Telcel (Mexico), CTI

(Argentina and Uruguay), Telecom Americas (Brazil), Comcel (Colombia and Ecuador), Megatel

(Honduras), AMOV Peru (Peru) and Tracfone (USA), and wireless and wireline providers such as Enitel

(Nicaragua), ACT (Guatemala), and CTE (El Salvador).

The company's offerings include prepaid voice services, post paid voice services (which include monthly

charges, usage charges and additional charges pay plans), roaming and long-distance services, and

data services (which include short message services (SMS), multimedia messaging service (MMS),

premium SMS and content community, Internet services, data transmission). America Movil also offers

customers handsets and accessories such as chargers, headsets, belt clips and batteries.

America Movil operates global system for mobile communication (GSM) networks in all its operating

markets. The company's main operating subsidiary, Telcel, offers voice and data services, and a variety

of wireless products, including handsets, chargers, headsets, belt clips and batteries. America Movil's

GSM and general packet radio service (GPRS) network enables the company to market data products

including short messages multimedia messages, MP3 and WAP Internet connections. The subsidiary

has also expanded its corporate level offerings to include wireless email (BlackBerry) and push-to-talk

services over GPRS.

The company's Ecuador division

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