We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
America Movil Awaits Supreme Court Ruling on Telecom Reform
Read MoreHide Full Article
The Supreme Court of Mexico is likely to deliver this month the verdict on the constitutional validity of the major provisions of the Telecommunications Reforms Law adopted by the government in 2013.
In 2014, the government of Mexico introduced some major reforms within its telecom sector. Per the Mexican telecom regulator, Federal Telecommunications Institute’s (IFT) reformed norms, the maximum hold of a company in any specific market has been restricted to 50%.
However, about 66% and 70% of telecom space is controlled by America Movil SAB’s (AMX - Free Report) wireline and wireless divisions, respectively. This has induced IFT to identify the company as a dominant player in the market. Additionally, to comply with the reforms, the IFT has banned America Movil from charging national roaming fees. Further, the company will have to share its infrastructure with other operators particularly in the local loop (last mileage) segment.
In 2014, America Movil filed an injunction against the regulator's decision to identify itself as a dominant operator and impose asymmetrical regulations on it. In Dec 2015, the company listed its wireless tower business – Telesites – which was spun off from the company, on the Mexican stock exchange. The spin-off of the wireless tower division was a strategic move to restrict the company’s market share to the 50% limit imposed by the IFT. In the same month, it won approval from the telecom regulator regarding the prices it can charge as interconnection fees.
Another incumbent telecom operator -- Telefonica S.A. (TEF - Free Report) -- holds around 20% market share. In 2015, U.S. telecom behemoth AT&T Inc. (T - Free Report) entered the Mexican telecom industry after the acquisition of Grupo Iusacell and Nextel de Mexico. In addition, Mexican cable MSO (multi service operator) Grupo Televisa S.A. (TV - Free Report) , has also received a go-ahead from the IFT to enter the wireless space. However, the company is yet to take any decision in this regard.
Mexico is the largest economy in the Latin American region, with a growing middle class population that is eager to spend more on high-speed wireless networks for optimal use of smartphones and tablets. Also the wireless penetration rate is relatively lower in the country compared with that in the U.S. We, therefore, expect increased competition in this market going forward.
Price performance of America Movil
America Movil is one of the strongest performers in 2017. Year to date, the stock price of the company gained a significant 24.56%, well above the Zacks categorised Non-US wireless industry that witnessed only 10.89% growth in the same time frame. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Image: Bigstock
America Movil Awaits Supreme Court Ruling on Telecom Reform
The Supreme Court of Mexico is likely to deliver this month the verdict on the constitutional validity of the major provisions of the Telecommunications Reforms Law adopted by the government in 2013.
In 2014, the government of Mexico introduced some major reforms within its telecom sector. Per the Mexican telecom regulator, Federal Telecommunications Institute’s (IFT) reformed norms, the maximum hold of a company in any specific market has been restricted to 50%.
However, about 66% and 70% of telecom space is controlled by America Movil SAB’s (AMX - Free Report) wireline and wireless divisions, respectively. This has induced IFT to identify the company as a dominant player in the market. Additionally, to comply with the reforms, the IFT has banned America Movil from charging national roaming fees. Further, the company will have to share its infrastructure with other operators particularly in the local loop (last mileage) segment.
In 2014, America Movil filed an injunction against the regulator's decision to identify itself as a dominant operator and impose asymmetrical regulations on it. In Dec 2015, the company listed its wireless tower business – Telesites – which was spun off from the company, on the Mexican stock exchange. The spin-off of the wireless tower division was a strategic move to restrict the company’s market share to the 50% limit imposed by the IFT. In the same month, it won approval from the telecom regulator regarding the prices it can charge as interconnection fees.
Another incumbent telecom operator -- Telefonica S.A. (TEF - Free Report) -- holds around 20% market share. In 2015, U.S. telecom behemoth AT&T Inc. (T - Free Report) entered the Mexican telecom industry after the acquisition of Grupo Iusacell and Nextel de Mexico. In addition, Mexican cable MSO (multi service operator) Grupo Televisa S.A. (TV - Free Report) , has also received a go-ahead from the IFT to enter the wireless space. However, the company is yet to take any decision in this regard.
Mexico is the largest economy in the Latin American region, with a growing middle class population that is eager to spend more on high-speed wireless networks for optimal use of smartphones and tablets. Also the wireless penetration rate is relatively lower in the country compared with that in the U.S. We, therefore, expect increased competition in this market going forward.
Price performance of America Movil
America Movil is one of the strongest performers in 2017. Year to date, the stock price of the company gained a significant 24.56%, well above the Zacks categorised Non-US wireless industry that witnessed only 10.89% growth in the same time frame. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>