Global Insight Perspective | |
Significance | América Móvil wants to snap up Amzak's Central American cable assets, giving it a footprint in Costa Rica. |
Implications | A successful takeover will further boost América Móvil's footprint, giving it stakes and operations in most Latin American markets. |
Outlook | With an expanded footprint, América Móvil can pursue its strategy of rolling out triple-play and quadruple-play services. |
Latin America's leading mobile operator América Móvil is in talks to acquire the cable TV unit of U.S.-based Amzak International, Amnet, Dow Jones reports, citing financial advisers close to the deal. Amnet offers data and telecoms services in Guatemala, El Salvador, Costa Rica, Honduras and Nicaragua, and is the largest cable TV operator in the region. Although both América Móvil and Amnet have refused to comment on the speculation, an América Móvil spokeswoman, Patricia Ramirez, noted that the company is always looking at investment opportunities.
Outlook and Implications
- Expanding Footprint: A takeover of Amnet by América Móvil will further boost América Móvil's already stretched footprint in the region. Currently, América Móvil is Latin America's largest mobile operator, with more than 124.8 million subscribers and about 5.9 million customers in its Central America region covering El Salvador, Guatemala, Honduras and Nicaragua. A deal will also give it access to Costa Rica, where it does not operate at the moment. América Móvil's fixed-line partner Telmex has also been active in the Latin American cable market. Earlier this month, it concluded a takeover of two Colombian cable operators and has confirmed that it is in talks to buy Peru's Boga Comunicaciones. Together with Telmex, América Móvil bought out Verizon's stakes in several Latin American markets in April 2006. With an eye on Telecom Italia's Brazilian and Argentine assets, América Móvil has also teamed up with AT&T to bid for a stake in Telecom Italia's holding company, Olimpia, although opposition from the Italian government is threatening to stall the deal (see Mexico: 4 April 2007: Telmex Agrees on Acquisition of Two Cable TV Operators in Colombia; Peru: 23 November 2006: Telmex to Up Investment in Peru; and World: 4 April 2006: Verizon Sells Latin American, Caribbean Assets to América Móvil and Telmex for US$3.7 bil.).
- Multi-Play Services: América Móvil's expanding footprint supports the group's quest to roll out triple-play and quadruple-play services across the region. Both América Móvil and Telmex have identified bundling voice, internet and video services as cardinal to their future strategy. Dow Jones reports suggest that Amnet's TV operations in Honduras and El Salvador could be complemented, with América Móvil's operations to offer quadruple-play services.