Argentine Personal Heading for 14mn Lines by Year-end

Argentine equity fund management firm Capital Markets Argentina (CMA) expects local mobile operator Personal to end 2007 with approximately 14mn lines in service compared to 9.6mn at end-2006, CMA analyst Carolina Kiernan told BNamericas.

The mobile business will be the main cash flow generator for Personal's parent company Telecom Argentina in the medium and long term, Kiernan added.

"Our estimates show that by 2010, the mobile telephony segment will represent 62% of the company's sales," Kiernan said.

Kiernan also said that TEO's main challenge regarding the mobile business is to stabilize its margins in a very competitive segment with a need for large investments to expand its GSM infrastructure in order to meet growing demand.

"The company is making important investments to maintain its market share and to be ready for fixed-mobile convergence. We are also expecting value added services to have a more prominent role in the company's ARPU, after the launch of 3G service last May," she added.

Meanwhile, CMA expects TEO's fixed line business to grow at moderate rates, reaching 4.1mn lines in service at the end of 2007, while CMA's previous forecast was 4.3mn.

Broadband services are key in the company's strategy for this segment as fixed telephony tariffs remain frozen and the segment is entering a decreasing phase after reaching maturity, according to Kieran.

TEO posted revenues of 2.15bn pesos (US$683mn) in Q2, up 24% on the 1.74bn pesos seen in 2Q06.

Posted to the site on 3rd October 2007