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Latin American Economy & Business - August 2016 (ISSN 1741-7430)

Region: Corporate Radar

América Móvil feels the squeeze: Mexico-based telecoms giant América Móvil reported a 45% fall in second quarter profits to MXN7.7bn (US$442m), reflecting a worsening performance in its home market, where it has been facing tighter competition and regulations under the Mexican government’s recent structural reform of the telecommunications sector. Profits were down by just under 44% in the first half of 2016; the company share price, listed on the NYSE, was down by 39% on year-earlier levels. The telecoms reform has obliged América Móvil to share its infrastructure (such as cell towers) and give smaller companies access to its network at regulated interconnection rates. Carlos Slim, the businessman who controls América Móvil and is regularly listed as one of the world’s richest men, told the New York Times that the reform had delivered a degree of regulatory clarity that all businessmen appreciated, but he was critical of the way his company had been targeted. Slim acknowledged that profits were down, attributing the fall to increased competition from the US-owned AT&T, and currency volatility across Latin America.

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