Nov. 5 (Bloomberg) -- America Movil SAB Chief Financial Officer Carlos Garcia Moreno said Brazil’s economic resilience will help its wireless industry outpace other Latin American countries through 2010.

“What you will see in Brazil this year and next year is that subscriber growth will be faster in Brazil than in the rest of the region,” Garcia Moreno, 52, said yesterday in an interview in Mexico City. “The next big surge of growth will come from Mexico.”

America Movil gets about 20 percent of its subscribers from Brazil, where its annual pace of customer growth equaled 19 percent last quarter, more than twice the rate in Mexico. The carrier, controlled by billionaire Carlos Slim, is relying on Brazil for expansion as Mexicans struggle to recover from the worst economic slump since the 1930s.

“The economy’s doing a little better, certainly, than in Mexico,” said Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore. “You’ve got robust competition, with three major players, four to five real national players in Brazil as opposed to essentially one in Mexico.”

America Movil, Latin America’s largest wireless carrier, has 25 percent of the market in Brazil, trailing Vivo Participacoes SA’s 29 percent. Tim Participacoes SA and Oi, the wireless unit of Tele Norte Leste Participacoes SA, also have more than 20 percent apiece.

Mexican Market Share

America Movil has more than 70 percent of Mexican wireless subscribers, followed by Telefonica SA with about 20 percent. America Movil lost 38,000 prepaid clients in Mexico last quarter, the first decline in its history.

America Movil, based in Mexico City, rose 68 centavos to 31.12 pesos at 4 p.m. New York time in Mexican trading. The shares have increased 47 percent this year.

The company gained 1.8 million subscribers in Brazil last quarter, ending September with more than 42 million customers. America Movil ended the quarter with 58.4 million subscribers in Mexico, a 7.3 percent increase from the year-earlier period.

Brazil’s trade ties to China have helped the country avoid a deeper economic slump, while Mexico’s economy remains closely linked to the U.S., Garcia Moreno said. Mexico’s economy will contract 7.2 percent this year, according to a Nov. 3 central bank survey, while Brazil’s probably will expand 0.18 percent, according to an Oct. 30 central bank survey.

Mexico’s economic growth generally lags behind the U.S. by about three months, Garcia Moreno said. Mexico has suffered from job losses and reduced consumption of imported goods, including wireless phones, he said.

Encouraging Signs

Mexican President Felipe Calderon said today at the Bloomberg Economic Forum in Mexico City that formal employment rose for the fifth straight month in October, a sign that the economy is recovering. In an interview at the forum, Garcia Moreno called Calderon’s remarks “encouraging.”

“As things look like right now, Brazil will be some months ahead of Mexico in terms of its growth path,” he said. “To the extent Mexico can also regain that kind of momentum for growth as we’re seeing in Brazil, we should also expect to see good subscriber growth in Mexico.”

An economic recovery will create new demand for prepaid service, while Mexicans will keep buying more data services such as wireless Internet access, contributing to an increase in growth, Garcia Moreno said yesterday. He didn’t provide specific targets or timelines.

Telecommunications Tax

America Movil plans to pass on to consumers the 3 percent tax on telecommunications services approved by Congress, Garcia Moreno said in today’s interview. He said he doesn’t expect the company to fight the measure in court.

America Movil was spun off in 2001 from Telefonos de Mexico SAB. The company operates in 16 countries in addition to Brazil and Mexico, which together account for about 60 percent of revenue. Last month the carrier’s U.S. unit announced plans to sell the Straight Talk prepaid service nationwide through Wal- Mart Stores Inc., the world’s largest retailer.

Garcia Moreno said he has no plans to buy a network in the U.S., where America Movil resells service from carriers such as Verizon Wireless through the Tracfone unit. The carrier now has more than 13 million customers there, partly because consumers are finding prepaid service more attractive, Garcia Moreno said.

The global economy hasn’t recovered enough for America Movil to seek acquisitions to broaden its Latin American reach, Garcia Moreno said. Potential acquisition targets may go through a “difficult period” in attracting financing, he said.

The company’s position in Latin America is “substantially complete,” with little interest in entering Bolivia or Venezuela, he said. The company may participate in planned auctions of wireless airwaves in Costa Rica and could consider entering another mobile-phone market in the Caribbean, moves that wouldn’t “really move the needle” of its financial results or investment plans, he said.

“At present we are happy with where we are,” he said. “There’s really no need to rush.”

To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net

Last Updated: November 5, 2009 16:21 EST