CEO: América Móvil Not Interested in Acquiring Millicom

Mexican mobile holding group América Móvil is not interested in acquiring the Latin American assets of European mobile holding company Millicom International Cellular, AMX chief executive Daniel Hajj said during an investors' conference call on the company's first quarter results.

Hajj clarified that any future acquisitions would be in countries where the company does not currently have operations, namely the Caribbean, Bolivia, Panama, Costa Rica.

"I don't think we're interested in [looking beyond] Latin America," Hajj said.

Millicom, whose Latin American operators are Telecel Paraguay, Telecel Bolivia, Comcel in Guatemala, Celtel in Honduras and Telemovil in El Salvador, entered a process of due diligence in January to contemplate selling its operations worldwide.

Hajj's announcement does not come as a surprise to analysts, for reasons of regulation and competition.

Besides prioritizing new territories, an obstacle to América Móvil acquiring Millicom would be anti-trust difficulties with respect to spectrum and market share in Millicom's three Central American markets, José Otero, president of Signals Telecom Consulting, told BNamericas.

"In Honduras América Móvil would become a monopoly, making it very unlikely they would get approval from the regulator," Otero said.

América Móvil is particularly interested in obtaining presence in Bolivia. But it can do that by bidding to acquire Entel Bolivia without having to buy Millicom. The European group, which also has assets in Asia and Africa, has stipulated that it will not divide up its Latin American assets but sell all or nothing.

According to Otero, the only company with presence in Latin America that may be interested in Millicom would be Spain's Telefónica, which lacks a presence in Bolivia, Paraguay and Honduras to compete with América Móvil.

According to Omar Salvador, analyst with Pyramid Research, América Móvil is interested in consolidating its subscriber base in the region and will concentrate its efforts in 2006 on nurturing the acquisitions it has already made this year.

Early last month US group Verizon Communications agreed to sell its Caribbean and Latin American operations, including a stake in Venezuela's Cantv, to América Móvil for US$3.7bn.

It is cheaper for AMX to obtain new subscribers via its existing operations than to obtain them through acquisitions, Salvador added.

BNamericas.com"

Posted to the site on 5th May 2006