America Movil CFO Sees 50 Million Potential Mexico Mobile Banking Users

Peter Elstrom| Bloomberg
America Movil, Latin America’s largest wireless carrier, will offer financial services to about 50 million people in Mexico who have mobile phones and no bank accounts, Chief Financial OfficerCarlos Garcia Moreno said.
That population is part of an “enormous” number of Latin Americans who could use their wireless phones to store and transfer money, Garcia Moreno said yesterday in a telephone interview. The company is already working on the project, he said, without providing details on when it would be available.
With financial services, America Movil is taking advantage of its wireless Internet network to seek new opportunities for growth in Latin America, as the number of mobile-phone users nears 100 percent of the population. The company told investors last week it expects to boost sales by 6 percent to 8 percent each year through 2014, compared with an increase of 5.3 percent last quarter from a year earlier.
“There are many more telephones than there are bank accounts, and it’s important to bank all of those people that already have a phone,” Garcia Moreno, 53, said. “The numbers are enormous.”
Garcia Moreno said he based his estimate for the potential size of the mobile-banking market on Mexico’s 86 million mobile- phone users and 35 million people with bank accounts.
America Movil, controlled by billionaire Carlos Slim, had 217 million wireless clients at the end of September, including 62.4 million in Mexico, where it controls about 71 percent of the market. The company last week forecast subscriber growth of 64 million lines through 2014, not including the U.S., where it has 16.7 million users.
Market Share
The estimate for subscriber growth assumes America Movil maintains its market share across Latin America, which may add about 150 million wireless lines over the same period, Garcia Moreno said.
America Movil fell 40 centavos to 35.13 pesos at 9:57 a.m. New York time in trading in Mexico City, where it’s based. The shares had risen 15 percent this year before today.
The company acquired Telmex Internacional SAB, also controlled by Slim, earlier this year to gain cable-TV, Internet and land-line phone networks in South America.
Slim, 70, has a traditional bank in Mexico. Grupo Financiero Inbursa SAB is Mexico’s fifth-largest bank by loans outstanding, according to government statistics.
America Movil said last week that it plans to invest about $8 billion a year in its networks through 2014 to prepare for the growth in demand it anticipates for data services such as Internet access. That’s higher than the forecast of analysts including Mauricio Fernandes of Bank of America Corp.’s Merrill Lynch unit, who predicted as much as $6.5 billion a year.
“They were looking at the investment expenses for last year, which was a year of crisis and low growth, and the capital expenditures reflected that,” Garcia Moreno said of analysts. “This is a growth cap ex, a cap ex that you do because you have demand. We have to do our work more quickly to be able to support that demand.”
To contact the reporter on this story: Crayton Harrison in Mexico City attharrison5@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net