UPDATE 2-Mexico telecoms overhaul starts to drag on America Movil
(Recasts with regulatory background)
By Christine Murray
MEXICO CITY, July 21 (Reuters) - Carlos Slim's America Movil, Latin America's biggest telecoms company, said on Monday that new regulation in its core Mexico market was beginning to weigh on its performance.
Lower exchange rate and financing costs helped the company increase its profit by 32.7 percent to 18.83 billion pesos ($1.45 billion) in the second quarter. Revenue also rose 4 percent to 202.63 billion pesos.
But the results were below expectations forecast in a Reuters poll of five analysts of a net profit of 20.74 billion pesos ($1.6 billion).
In Mexico, where the company makes almost two-thirds of its core profit, tough new regulations that force it to share infrastructure, stop national roaming charges and slash what it charges competitors to use its network, began to take effect.
Mobile voice revenues in Mexico were down 8.7 percent year- on-year due to the new rules, the company said, though data revenue growth on mobile and fixed-line slightly outweighed the fall in fixed-line and voice revenue.
The telecoms sector overhaul was initiated by President Enrique Pena Nieto to drive competition in the sector where Slim controls around 70 percent of the mobile market and more than 60 percent of landlines.
Earlier this month, as the new regulations were being finalized, America Movil surprised the market by saying it aimed to avoid the new rules by selling a chunk of Mexico assets to a new, probably foreign, competitor. Continuación...