Mexican Telecom giant
America Movil S.A. de C.V.'
) subsidiary Claro has unveiled its plan to invest $249 million in
Argentina in 2012 to build additional cell sites and extend its
fiber-optic connections across the country. The new investment is
in addition to the previously declared $1 billion of investment in
"Cell site" is a term used to describe a site where antennas and
other communication related equipments are placed, usually on
towers to create a cell in the existing cellular networks. The
additional investment would enable the company to build 150 cell
sites in excess of its initial planning, which in turn would
increase the number of cell sites to be built during the year to
Claro, the largest mobile operator in Argentina with a customer
base of almost 20 million, faces stiff competition from
Telecom Argentina SA
). The Mexican company is extending its fiber-optic cable network
in different parts of Argentina to extend its retail broadband
access service which could partially offset its weak landline
Argentina possesses one of the highest mobile ownership rates in
the world which stands at 142 mobile phones for every 100 residents
and handily beats its American counterparts Brazil and the U.S.
According to research firm IDC, the smartphone market is expected
to grow at a CAGR of 12.7% from 2012-2016, which could increase the
ownership rate even further.
To sustain this increasing adaptation of smartphone the company
has recently launched 4G services, which is the first of its kind
in Argentina and offers a speed of up to 5MB per second. It is
believed that to support the increased demand of data traffic from
smartphone users, the company is expanding its cell sites which
when completed will put the number of cell sites connected by
fiber-optic cable to more than 1400.
The current Zacks Consensus Estimates for America Movil is
pegged at $1.04 for the second quarter with a growth rate estimate
of (53.97%). For 2012 and 2013, the Zacks Consensus Estimates
stands at $2.22 and $2.08 with growth rate of (6.14%) and 4.67%,
We, maintain our long-term Neutral recommendation for America
Movil S.A.B. de C.V. Currently, AMX has a Zacks #3 Rank, implying a
short-term Hold rating on the stock.
AMER MOVIL-ADR (AMX): Free Stock Analysis
TELEFONICA S.A. (TEF): Free Stock Analysis
TELECOM ARGENTI (TEO): Free Stock Analysis
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