The planned sale, announced on Tuesday, would cut the company’s
dominant market share in Mexico and could generate billions of
dollars. Slim, in his first interview since the announcement, also
said the company would pursue expansion into Central and Eastern
Europe through its investment in Telekom Austria and would likely
sell the Mexican assets to a single buyer.
"Some people say that we are going to sell the low income customers,
but nobody will buy that, we are thinking that we should do it in
some transversal way...something that is attractive to buyers," Slim
said late on Thursday in an interview conducted in both English and
The sale needs to be big enough to create space for a "competitor
all the way, in all the country," said the 74-year-old, who was the
world's richest man between 2010 and 2013.
Seated in his simple office in Mexico City where he had been reading
an article about French economist and inequality expert Thomas
Piketty, Slim declined to name a price for the sale, though he said
it would happen soon.
"For us, six months isn't fairly quickly, it's slow," said Slim,
whose wealth, estimated by Forbes at nearly $78 billion, ranks
second in the world behind software pioneer Bill Gates.
Jumping from one subject to the next before circling back, and
punctuating his talk with jokes and asides, Slim said that contrary
to what many analysts believed, America Movil did not plan to sell
its cell phone towers under Tuesday's announcement.
"It says they will be separated, not sold," he said. “What's being
proposed is to open up the cell phone towers ... so they can be
rented to anyone interested in renting towers.”
America Movil, which had total revenue of 786 billion pesos ($60.5
billion) last year, controls 70 percent of Mexico's mobile phone
market and well over half of its fixed line and internet business.
It’s a prime target of President Enrique Pena Nieto's drive to spur
competition in key industries dominated by a few families.
U.S. company AT&T has been flagged as one potential buyer for the
America Movil assets but Slim said the field was open.
"We don't have a preference," he said.
He said firms with the financial muscle to compete with America
Movil on its home soil were unlikely to be Mexican. The only other
major player in Mexico's cell phone market is Spain's Telefonica
with a share of about 20 percent. He said a sale to a single company
would make sense. Both AT&T and Telefonica declined to comment on
America Movil’s plans.
Telefonica also competes with Slim in Latin America's largest
economy Brazil, where it leads the mobile market through its Vivo
unit. America Movil's local brand Claro has a quarter of the market,
and Slim said it has room to grow.
"Twenty-five percent is very low," he said.
Slim may have an opportunity in Brazil if a potential mobile
consolidation occurs involving Telecom Italia's TIM, the number two
mobile provider. Regulators in December ordered Telefonica to
resolve its position as owner of Vivo and part owner of TIM via its
stake in Telecom Italia.
To comply, Telefonica wants to break up TIM and divide its assets
and network between itself and the other two mobile firms in Brazil,
America Movil, and Oi, sources told Reuters in May.
Asked if he would be interested in TIM assets, Slim said:
"Let's not speculate about possibilities. Obviously, I said before
that America Movil's priority is organic growth. But if there are
opportunities or circumstances to consolidate something that's good
for the development of the company, like any other company, it does
[to top of second column]
Slim had been anticipating tougher regulations at home and in 2013
swooped for control of former state-owned Dutch telecoms firm KPN.
The bid failed, saddling America Movil with what is still a
multi-million dollar paper loss.
But KPN was a valuable lesson for the Mexican company, and a
subsequent venture into Europe to take a majority stake in Telekom
Austria came to fruition in April.
Slim hinted that America Movil could withdraw from KPN once the
price was right, drawing a clear distinction between its respective
holdings in the Netherlands and in Austria.
Whereas Telekom Austria was a long-term strategic asset co-managed
by America Movil, KPN was an investment, he said.
America Movil aims to use Austria as a base to push into Central and
Eastern Europe, a region that has "plenty of mileage left in it",
According to two people familiar with the matter, Slim has also
looked at purchasing a large stake in another former-state owned
phone business, Turk Telekom, via Dubai-based Oger Telecom, which
holds 55 percent of the company.
Slim denied he was moving for Turk Telecom. "Up to now as far as I'm
aware, we aren't in talks about that," he said.
For now, there looks to be no shortage of business at home.
The opening of Mexico's oil and gas industry to private capital and
Pena Nieto's plan to line up 7.7 trillion pesos ($592.56 billion)
worth of public and private investment in infrastructure by 2018
could be a major windfall for Slim.
Slim's Grupo Carso has big interests in construction, while he can
tap into the energy sector through companies like Bronco Drilling MX
and platform-maker Swecomex.
"One of the areas with most scope for investment is infrastructure,
and I'm including energy there," he said, without specifically
referring to his own companies.
($1 = 12.9940 Mexican Pesos)
(This version of the story was refiled to add dropped words in the
first and twelfth paragraphs)
(Additional reporting by Tomas Sarmiento in Mexico City, Robert Hetz
in Madrid, Seda Sezer in Istanbul and Leila Abboud in Paris. Editing
by John Pickering.)
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