FILE PHOTO: The logo of America Movil is pictured on the wall of a reception area in the company’s corporate offices in Mexico City, Mexico, May 18, 2017. REUTERS/Edgard Garrido/File Photo
MEXICO CITY (Reuters) – America Movil, Mexico’s largest telecommunications provider, shed light on its plans to roll out 5G technology in Latin America on Wednesday as the company’s shares surged on a strong earnings report.
America Movil shares rose as much as 6% to 16.72 pesos, the highest since July 2018. The company controlled by the family of Mexican billionaire Carlos Slim reported a 63% increase in fourth-quarter net profit on Tuesday, helped by reduced costs and strong gains in postpaid customers.
For 2020, America Movil will focus on rolling out 5G technology in Latin America, Chief Executive Daniel Hajj said on a call with analysts. The technology will likely debut in Mexico this year and may arrive in Brazil as well, depending on the availability of spectrum, Hajj added.
“We just launched in Austria our 5G network,” Hajj said. “And we’re going to do that all around Latin America in the second half of the year.”
The company expects capital expenditures of $8.5 billion for the year, on par with last year’s, Hajj said. The investment will be focused on deploying fiber in Mexico, Colombia, Brazil and other markets, Hajj said.
Hajj also expressed optimism about the prospects of America Movil’s U.S. subsidiary, TracFone, as T-Mobile US Inc’s takeover of Sprint Corp advances. A federal judge approved the deal on Tuesday.
“It’s good for TracFone – it’s good to have all of this consolidation in the market,” Hajj said.
In a note to investors, investment bank Barclays applauded America Movil’s gains in lucrative postpaid customers during the quarter, as well as improved profitability in markets such as Colombia, Peru and the United States.
Reporting by Julia Love; Editing by Richard Chang