The largest telecom provider in Mexico America Movil (AMX) plan to invest approximately $350 million in services through its subsidiary Claro in Peru. The investment will be made over a three-year period and is the first major foreign investment in the country under President Ollanta Humala.
America Movil remains the second largest telecom provider in Peru with a market share of approximately 38% following its biggest rival Telefonica (TEF), which dominates approximately 57% share in the wireless market. Peru’s telecom market is expected to register a double-digit growth with approximately 30 million wireless subscribers by 2014.
Based on such strong estimates, America Movil remains well positioned to gain approximately 43% market share over the long term given its expansion plans in the country. Apart from wireless services, America Movil also provides fixed-line and PayTV services in Peru, catering to over 668,000 homes.
America Movil remains committed to improving service offerings to its customers, investing aggressively in cellular network expansion in Latin America and in the development of new generation broadband networks, both in the fixed and the mobile platforms.
The company expects to spend approximately $8 billion over the next four years for the expansion of data networks. This data network is expected to boost data revenue through the Alcatel-Lucent mobile backhaul solution that will deploy next-generation mobile services in Latin America. America Movil expects the Latin American wireless market to add over 150 million subscribers over the next four years.
We currently maintain our long-term Neutral recommendation on America Movil supported by a Zacks #3 Rank (Hold).
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