Millicom Contemplates Fixed-Line Purchases as Earnings Rise
Millicom International Cellular SA (MIC), the mobile-phone operator whose Tigo brand serves customers from Guatemala to Tanzania, may expand its fixed-line assets as its user base grows past 43 million customers.
“We are looking with some interest at fixed operations because after we are extremely happy with the development we got with the purchase of Amnet in Central America three years ago and we see more synergies between fixed and mobile,” Chief Financial Officer Francois-Xavier Roger said in a telephone interview today.
Millicom, which paid $510 million for broadband and cable provider Amnet Telecommunications Holding Ltd. three years ago, reported earnings that beat analyst estimates as South American consumers boosted spending on services such as music and money transfer. The company is in no hurry to spend, Roger said.
“Prices over the last couple of years were really on the high side,” he said. “We may see more opportunities in the next couple of years because some large operators are disposing of assets that are too small for them, but could be of interest to us.”
Operators who have indicated they will focus on their larger assets include France Telecom SA (FTE) and Telefonica SA (TEF), he said, adding that Millicom isn’t necessarily interested in those companies’ properties.
Millicom shares climbed as much as 3.1 percent to 690 kronor in Stockholm trading, the biggest gain since Dec. 13, and were trading 11 kronor higher at 680.5 kronor at 3:15 p.m. in the Swedish capital. The company has gained 9.4 percent in the last year, putting its market capitalization at 69 billion kronor ($10.4 billion).
Net income climbed to $180 million, compared with the average estimate of $176 million from eight analysts compiled by Bloomberg. Sales of $1.18 billion matched analyst estimates.
Millcom said it increased capital expenditure on broadband equipment, chiefly in Latin America, and on corporate information systems. Millicom’s other main market is Africa, which has some of the world’s lowest-revenue phone customers and fastest rates of wireless growth.
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