20. What has been the evolution of Telcel/América Móvil?

Let’s continue with the following table of América Móvil.  This is a table that shows more or less how value has been created, for example, in this company.  This company was practically non-existent in 90; it had 35 thousand customers; it had started after the competitors did, after Iusacell, and it bought Telefónica in the northern part of the country, it had 35 thousand customers.

In the first column we have the number of customers, the years, the annual growth, the number of customers with cell phones in Mexico, growth in México and the company’s market value.

The company’s market value is only valid as of 2001 because the other one is an estimate.  We simplified it, just for the sake of it, we simplified it.

We want to encourage everything.  What we have seen, and besides this is something else that happens with competition and with our main competitor; isthat the market is going to grow and also when you are rendering two services, the price can drop, and when you provide three services, prices decrease even more.  Then, it has never been our strategy to discourage competition.

Here, what we have always thought, and these are our innovations; what we innovated, is pre-payment.  We believe we invented it, but the Portuguese say the same thing and I believe also the Italians and the Greeks.  We started to study it in 92, , but I believe we launched it into the market and was already working, in 95 or 06.

Actually, probably after China, we are the number one company in the world that has more pre-payment customers, that is, proprietary, after China.

At least we are one of the first three companies.  I do not know if Vodafone, but it has a lot of post-payment.  The thing is that we have many pre-payment customers.  But not only pre-payment customers, this is what allowed us, for example, as of 96, when we really push it hard, to experience a 64.7, 69, 90 growth.  Because it is very easy to grow from 35 thousand to 70 thousand.  I am going to grow 90, 145 to 149  , 110; 2002 was the year we experienced the bubble.

It is also interesting to point out that when Telefónica came into México, in the second semester of 99, the total market was not even 10 million customers, eight or ten million customers.  This means that since then, and I am talking about Mexico, here what we do, is that this is América Móvil's market value, then here is the average value per customer.  Obviously it is not correct, we got 497 dollars per customer, then we multiplied 497 times the number of customers; but this is not right either. This was just to see the evolution.  And if it had been so and if América Móvil had been worth 17 million dollars at 500 dollars per customer, the appreciated América Móvil market value would be 69 per cent a year.  If instead of 17 it is 35 to one thousand dollars per customer, well then probably the percentage is less.  But the spectacular issue about the company’s growth and the creation of value that has happened in this company cannot be debated; there is no doubt about it.

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