América Móvil anticipates launching 5G services this year in 90% of the countries it operates in, including Mexico where telecom regulators just this week gave subsidiary Telcel the green light to use mid-band spectrum for 5G mobile operations.
Mexico City-based America Movil has subsidiaries spanning 19 countries, with most of its operations concentrated in Latin America. It has a 21% stake in KPN in the Netherlands and a 51% stake in Telekom Austria.
Speaking Wednesday on the company’s fourth quarter earnings call, America Movil CEO Daniel Hajj highlighted the plans for 5G launches this year, but as to timing said, “I don’t have a specific date.”
“We hope we can do it in the first semester of this year, mostly,” he added.
He noted that America Movil has 5G spectrum in nearly all of its operating countries in Latin America, aside from Colombia.
“And we hope that the government would speed up that option,” Hajj said regarding spectrum in Columbia, according to a transcript.
On the spectrum front, the operator attributed around $1.1 billion in capex for spectrum in 2021, including $800 million in Brazil. In 2022 America Movil is planning around $8 billion in network capex.
“I think it’s important to have 5G [in] all the countries where we operate,” Hajj continued. “We are ready.”
America Movil has been making investments, including Columbia with fiber to the node and fiber to the cell site, as well as in virtualization. Over the last five years, he said the company has been modernizing its cell sites, and across markets has 3G, 4G, 4.5G, teeing up readiness for 5G as well.
5G spectrum green light in Mexico
The same day as the earnings call, Mexican telecoms regulator Federal Telecommunications Institute (IFT) approved the request of America Movil’s Telcel to modify usage rules for spectrum in the 3.45-3.55 GHz band so it could be used for mobile wireless service in the country.
Under prior rules, the spectrum was only authorized to provide service via fixed wireless access.
“With this, Telcel will be able to put into operation the largest 5G commercial network in Latin America, based on the deployment it has been carrying out for the provision of fixed wireless access services with 5G technology.” wrote IFT in its approval. As a result of the authorization, Mexico will receive more than $43 million in fees annually to use the spectrum for mobile 5G.
Telcel is the leading wireless provider in Mexico and its main rival AT&T Mexico announced in December a limited launch of 5G in the country.
America Movil is seeing a lot of traction with prepaid customers in the country, where it reported 1.2 million net additions in the fourth quarter that were nearly all prepaid users. Accounting for nearly half, Mexico was the biggest contributor to a total of 2.5 million total prepaid net adds across America Movil markets, followed by Columbia at 349,000 prepaid net adds and Argentina adding 294,000.
Mexico represents America Movil’s largest wireless base, where it ended December with 80.5 million subscribers – 3.5% more than the year prior.
Wireless service revenue for Mexico was up 9.1% year over year in the fourth quarter. Prepaid wireless service revenue rose 12.5%, while postpaid increased 4.8% as the company saw ARPU rise 6.2%.
Brazil drives postpaid subscriber growth
While prepaid dominates in Mexico, America Movil saw fourth quarter postpaid subscriber additions of 2.2 million driven by Brazil, where it controls provider Claro.
The company added 1.1 million postpaid subscribers in Brazil during Q4, while Colombia added 357,000 and Austria contributed 202,000 postpaid subs. Overall, America Movil’s postpaid base increased 10.1% year over year. At the end of December, it counted 287 million wireless lines across operations.
For consolidated results, fourth quarter revenue grew 7.7% to around $11.07 billion, with service revenue increasing 5.4% to roughly $8.76 billion.
America Movil posted a net profit of 135.6 billion pesos (around $6.6 billion) in the fourth quarter, boosted by the sale of TracFone to Verizon, which closed in November.
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