The telecom industry in Latin America is solid with two main telecom players across the subcontinent. Accordingly, the two main telecom operators in Latin America are América Móvil S.A.B. de C.V. and Telefónica S.A. América Móvil originated from the privatization of a state-owned monopoly in Mexico and today is the crown-jewel of Mexico’s Carlos Slim Helú while Telefónica is a Spanish multinational which has strong market positions in Europe and Latin America. Other telecom players worth mentioning are Telecom Italia S.p.A., the Brazilian telecom operator known as Oi S.A., Millicom International Cellular S.A, Empresa Nacional de Telecomunicaciones S.A. abbreviated as ENTEL in Chile, Compañía Anónima Nacional de Teléfonos de Venezuela abbreviated as CANTV on Venezuelan ground, AT&T México S.A.U. and Telecom Argentina S.A. Moreover, for the purpose of this study, I think is helpful for me to describe the market penetration of nine companies including América Móvil, Telefónica, Telecom Italia, Oi, Millicom International Cellular, ENTEL, CANTV, AT&T México and Telecom Argentina as follows:
América Móvil S.A.B. de C.V.: mammoth telecom company in Latin America and former state-owned monopoly in Mexico. It leads the industry as a whole in Latin America for wireless telecom services with over 260 million paying subscribers and leading wireline telecom services in Mexico where it owns the national champion known as Telmex S.A.B. de C.V. Currently, the company operates for wireless telecom services under the brand “Telcel” in Mexico and the brand “Claro” in Puerto Rico, the Dominican Republic, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Colombia, Ecuador, Peru, Brazil, Paraguay, Chile, Argentina and Uruguay. In the US, América Móvil owns TracFone Wireless Corporation while operating here under several brands including the initial one known as “Telcel America”. In addition, the company is rolling out bundles like broadband internet and Cable TV in various countries including Brazil where the Mexican giant bought the long distance monopoly known as Embratel S.A. as well as purchasing also a controlling economic interest in the broadband internet and Cable TV operator known as Net Servicos de Comunicação S.A. while renaming it NET from the Brazilian media titan known as Grupo Globo S.A. Likewise, the wireless telecom unit in Brazil operating there under the brand “Claro” comes after purchasing two telecom outfits belonging to a partnership owned jointly by the Safra banking clan and BellSouth Corporation. Moreover, the company is currently a worldwide leader in marketing innovation after the introduction of prepaid plans in wireless telecom services well-suited for the emerging region enabling the telecom carrier to rapidly gain market leadership in most of the countries where it operates in Latin America. On the other hand, the company is expanding across continents in Europe after having saturated acquisitions in Latin America. In fact, it now owns 30% of Dutch telecom multinational KPN N.V. while looking to buy the rest and 60% of Telecom Austria A.G. By the same token, these acquisitions along with additional ones that are expected to be made in Europe are intended to offset unfavorable antitrust legislation in Mexico where the company is being forced to shrink size nationwide in order to let other telecom operators grab market share and increase competition. Furthermore, trading in Mexico as well as an ADR on the NYSE, under the ticker symbol (AMX), the company reports consolidated revenues expected to surpass $ 60 billion this year while profits reaching close to $ 10 billion and a market value hovering $ 70 billion today.
Telefónica S.A.: outstanding Spanish multinational having strong market positions in Europe and Latin America while trading in Spain and here in America as an ADR on the NYSE under the ticker symbol (TEF). The company leads wireline telecom services under its namesake company brand “Telefónica” in Argentina, Chile, Colombia, Guatemala and Peru after having more than 50 million active wirelines including Brazil where it is the second biggest wireline telecom operator after Oi. Moreover, the company expanded tremendously after the purchase of BellSouth’s vast telecom operations throughout the region back in the late 1990s and as a consequence, it operates wireless telecom services under the brand “Movistar” in Argentina, Chile, Colombia, Venezuela, Ecuador, Peru, Mexico, Guatemala and Panama. On the other hand, in Brazil the company is the biggest player for wireless telecom services having a total of 80 million paying subscribers and operating there under the brand “Vivo” after purchasing the rest it didn’t already own in the publicly-traded holding company controlling Vivo Participações S.A. known as Brasilcel N.V. from Portugal Telecom S.A. and Brazilian minority shareholders.
Telecom Italia S.p.A.: outstanding Italian multinational trading in Italy as well as an ADR on the NYSE under the ticker symbol (TI) and currently present in Brazil where it owns the third biggest wireless telecom services provider there known as TIM Celular S.A. In addition, Telecom Italia was until recently present in Argentina as well controlling Telecom Argentina S.A. along with the Werthein clan through a listed holding company known as Nortel Inversora S.A. Nevertheless, both Telecom Italia and the Werthein family have been divesting themselves of their economic interest in Nortel Inversora while letting other strategic investors acquire control of the publicly-traded holding company.
Oi S.A.: biggest wireline telecom operator in Brazil after purchasing Brasil Telecom S.A. as well as the rest it didn’t already own in Tele Norte Leste Participações S.A. about a handful of years ago while having a total of 17 million active wirelines and 50 million paying subscribers for wireless telecom services. Trading in Brazil and controlled by a consortium led by the Brazilian engineering concern and infrastructure developer known as Andrade Gutierrez Engenharia S.A., the company reports combined revenues expected to exceed $ 15 billion this year.
Millicom International Cellular S.A.: relevant multinational from Europe trading there while focused solely on wireless telecom services in emerging markets under the brand “Tigo”. Moreover, with a widespread and solid presence throughout Central America, the company is the industry leader in Paraguay, El Salvador, Honduras and Guatemala after having bought the leading wireless telecom player in the last country mentioned known as Comcel S.A. about a couple of years ago from Mario López Estrada, Central America’s only billionaire presently ranked by Forbes. Altogether, the company has close to 20 million paying subscribers for wireless telecom services across the whole Central American subcontinent except for Panama as well as holding a leading presence in Paraguay.
Empresa Nacional de Telecomunicaciones S.A.: doing business by its acronym as ENTEL, this company dominates the Chilean market offering attractive bundles in telecom services nationally while constituting a prominent blue chip listed in the newly integrated MILA stock exchange. Currently, the company is controlled through super-voting common stock by a publicly-traded holding company known as Almendral S.A. through one of its investment vehicles belonging to the old money Matte clan in Chile. Moreover, the company reports combined revenues that exceed $ 3 billion a year nowadays.
Compañía Anónima Nacional de Teléfonos de Venezuela C.A.: known by its abbreviation as CANTV, this company dominates the Venezuelan market in all segments. Accordingly, listed in the Caracas stock exchange, the company is controlled by the Venezuelan state and boasts approximately 10 million wireless customers, 5 million active wirelines and about a million paying subscribers for broadband. Moreover, in the competitive Venezuelan wireless telecom market with the presence of two competitors including the Spanish multinational known as Telefónica S.A. and the local privately-held company known as Corporación Digitel C.A., CANTV is the undisputed leader of wireless telecom services in Venezuela under its brand “Móvilnet” while monopolizing the wireline business there along the way after being the sole recipient of the national telecom concession granted by the Venezuelan government since the 1930s.
AT&T México S.A.U.: third biggest wireless telecom operator in Mexico. The operation boasts 8 million wireless customers in Mexico and comes from the purchase made by AT&T Corporation of Grupo Salinas’ wireless telecom unit on Mexican soil under the brand “Iusacell” while combining it with its existing operations in this telecom segment of the local market in the Latin American nation. Overall, the transaction was consummated last month for a price tag of $ 2.5 billion including the assumption of $ 800 million of liabilities. In addition, the Mexican wireless telecom operator is the first in Latin America to use 3G fixed wireless technology for its network.
Telecom Argentina S.A.: prominent telecom operator in Argentina offering attractive bundles including wireline, wireless and broadband internet services. Forming a duopoly together with Telefónica de Argentina S.A., the company reports combined revenues north of $ 4 billion a year and around half a billion dollars in profits year in and year out. Currently, the company is controlled by a publicly-traded holding company in Argentina known as Nortel Inversora S.A. and trades in Buenos Aires and here in the US as an ADR on the NYSE under the ticker symbol (TEO).