Telmex Profit Declines as Televisa Lures Telephone Subscribers
Telefonos de Mexico SAB, the nation’s largest land-line phone company, said second-quarter profit fell 12 percent as Grupo Televisa SA (TLEVICPO)’s cable units lured users with packages of voice, TV and Internet service.
Net income dropped to 3.15 billion pesos ($270 million), or 17 centavos a share, from 3.57 billion pesos, or 20 centavos, a year earlier, Mexico City-based Telmex said yesterday. Sales fell 2.9 percent to 27.6 billion pesos, beating the 27.3 billion-peso estimate of Andrew Campbell, an analyst at Credit Suisse Group AG in Sao Paulo.
Telmex, controlled by billionaire Carlos Slim’s America Movil SAB, is fighting in court to overturn the Mexican government’s decision to deny it a license to offer television service over its phone lines. Meantime, it’s selling a package of services with satellite-TV provider Dish Mexico to keep clients from switching to Televisa’s cable units.
Phone lines operated by Telmex fell to 15.3 million, a loss of 308,000 from the previous quarter, including 113,000 disconnected lines that were no longer being used because they had been dedicated to technical support for dial-up Internet services. High-speed Internet subscriptions increased 112,000 to 7.57 million.
Telmex gained 9 centavos to 9.41 pesos yesterday in Mexico City trading before results were announced. The shares have lost 6 percent this year.
(The company plans to hold a conference call at 10 a.m. New York time. To listen, call 866-270-6057 from the U.S. or +1-617-213-8891 outside the U.S. and use the password “Telmex.”)
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