America Movil Sees Investing $200 Million In Peru In Next 2 Years

LIMA -(Dow Jones)- Mexican wireless communications provider America Movil SA (AMX) plans to invest around $200 million in Peru over the next two years, America Movil Chief Executive Daniel Hajj said Tuesday.

On Aug. 10, America Movil bought Telecom Italia Mobile SpA's (TI) Peruvian TIM unit, giving it an instant client base of more than one million subscribers in the Andean nation.

Earlier this year America Movil paid $21.1 million for a 20-year license to operate in Peru and was planning on entering the market in December.

However, buying TIM has given it a solid foot in the door.

"Buying TIM has given us a space to operate and compete more strongly in Peru. It is not the same to start with zero subscribers as it is to start with a group of subscribers and coverage," Hajj told journalists.

The Mexican company can continue using the TIM brand name for nine months during which time it will gradually introduce its own brand name, he said.

According to Hajj, the only change for clients will be the new name.

The official said the $200 million will be used to broaden existing coverage, maintain the digital network and strengthen customer care.

"We want to take cellular phones to many more zones," said Hajj.

Hajj said his company is not going to war with Telefonica Moviles SAC, a unit of Spain's Telefonica SA, (TEF) as there is plenty of room for growth in Peru's market given its low cellular-phone density.

According to the latest figures from Peru's telephone regulator Osiptel, cellular telephone density was 15.90 per 100 residents.

"It is 35% in Latin America so there is lots of room for growth in Peru," said Hajj.

He did not hide, however, his ambition.

"Of course our aim is to be the leading operator," he said.

According to Hajj, America Movil is in the process of presenting a proposal to the Ministry of Transport and Communications in order to operate the band it originally obtained and the TIM band.

"We are within what the law permits and we will try to maintain the band," he said.

America Movil, which is controlled by billionaire Carlos Slim, operates in 14 countries, including most Latin American nations and the United States.

At the end of June, without taking into consideration recent purchases in Chile and in Peru, it had 75 million clients, said Hajj.

Shortly before it made the TIM purchase in Peru, America Movil bought a cellular phone company in Chile.

"During 2006 we expect to have more than 100 million clients," he said.

-By Rebecca Howard, Dow Jones Newswires; 511-221-7050; peru@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 24th August 2005