Morgan Stanley: America Movil Plans 3G Technology In 07

MEXICO CITY -(Dow Jones)- America Movil, Latin America's largest wireless telephony concern, plans to launch third-generation technology in 2007 when it expects handset prices to be lower, investment bank Morgan Stanley said Friday.

Morgan Stanley said in a report that it hosted a roadshow this week for America Movil, which operates in 14 countries in the Americas.

The rollout of 3G, Morgan Stanley said, wouldn't require America Movil to raise its plans for capital investment of about $3 billion a year. Most of the company's networks use the GSM system.

"The company prefers to wait until 2007, given the high levels of 3G handset prices today," Morgan Stanley said.

America Movil hasn't been in a hurry to upgrade to third-generation, arguing that Latin America has lower penetration rates that Europe, for example, and still has plenty of room for growth without introducing new applications.

Mexico's smallest mobile phone operators, Grupo Iusacell and Unefon, teamed up earlier this year to upgrade their networks for EV-DO, or "evolution-data optimized," technology, which builds on the CDMA platform. GSM can be upgraded with technology known as WCDMA, or GSM 3G. America Movil's main competitor in Mexico and Latin America, Telefonica Moviles of Spain, also uses GSM.

Morgan Stanley said America Movil is also planning to step up its push-to-talk service - akin to using walkie-talkies - which it offers in several countries including Mexico and Brazil but has yet to promote aggressively.

Mexican unit Telcel has about 200,000 push-to-talk customers, competing with both Telefonica Moviles and market leader Nextel Mexico, a unit of NII Holdings (NIHD).

-By Anthony Harrup, Dow Jones Newswires; (5255) 5080-3450, anthony.harrup@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 2nd December 2005