America Movil’s Q1 2025: Revenue Surge Masks Brewing Storms in Latin America

The first quarter of 2025 has painted a contradictory picture for América Móvil SAB de CV (AMXOF): a 14.1% revenue surge to 232 billion pesos and record postpaid subscriber gains clash with looming economic slowdowns, regulatory battles, and cutthroat competition. Let’s dissect the numbers to uncover whether this telecom titan is scaling new heights—or teetering on a knife’s edge.

Financial Fortitude in a Challenging Landscape

América Móvil’s top-line growth, driven by postpaid subscriptions (+8.8%) and fixed broadband (+9.8%), outpaced expectations. Postpaid added 2.4 million subscribers globally, with Brazil leading the charge (987,000 new users), while fixed broadband expanded by 446,000 connections. These gains were amplified by currency tailwinds: the Colombian peso and Chilean peso strengthened by 18% and 14%, respectively, against the Mexican peso.

Yet beneath the surface, risks loom large. Mexico’s economy—a cornerstone of the company’s operations—contracted by 1% in private consumption, squeezing prepaid services. Prepaid subscriber losses in Mexico (821,000) and Brazil (25,000) highlighted the MVNO threat, with cut-price rivals like Byte siphoning budget-conscious users. This pressure forced América Móvil to pivot toward high-value prepaid customers, a strategy that’s showing early success via improved number portability trends.

The Postpaid Play: Winning the High-Growth Game

América Móvil’s focus on postpaid and fixed services is paying off. In Chile, post-acquisition integration is fueling broadband revenue growth, while Colombia’s fixed broadband share (now 27%) underscores its dominance. The company’s 5G rollout in Chile and fiber deployment could further boost margins in a market where fixed broadband revenue grew 14.1% year-on-year.

However, Mexico’s economic malaise casts a shadow. High real interest rates and political uncertainty have stifled consumer spending, leading to a net loss of 1 million prepaid users in Mexico and Brazil. Management’s bet on the Mexican economy “bottoming out” in Q1 hinges on declining interest rates and USMCA reforms, but delays or missteps here could derail recovery hopes.

Regulatory Crossroads: Dominance or Disruption?

The Mexican government’s proposed telecom laws threaten to reshape the industry. América Móvil insists it’s no longer a monopolist—its fixed broadband share in Mexico is 27%, far below AT&T’s 55%—but regulators may still tighten spectrum allocation rules or antitrust scrutiny. With these laws expected to finalize within two months, the company’s lobbying efforts will be critical.

Meanwhile, capex cuts (to 6.7 billion pesos in 2025) signal caution amid uncertainty. Reduced spending reflects both prepared infrastructure (e.g., cloud systems) and a pragmatic response to economic headwinds.

M&A Hopes and Chilean Ambitions

While América Móvil remains open to acquisitions, it’s not chasing deals recklessly. The company’s eyes are on Telefonica’s potential asset sales, but it’s prioritizing organic growth in Chile. With its recent acquisition there, Chile now represents a high-potential market for 5G and fiber, offering a path to higher margins and reduced reliance on slower-growth regions.

The Bottom Line: Growth vs. Gravity

América Móvil’s Q1 results are a masterclass in balancing growth and risk. The 14.1% revenue jump and postpaid dominance prove its strategy is working, but the Mexican economy’s fragility and regulatory threats could cap upside.

The company’s 38% net income surge to 18.7 billion pesos highlights operational discipline, while its 9.8% fixed broadband growth signals long-term resilience. Yet the 1 million prepaid losses and MVNO competition underscore vulnerabilities.

Investors should weigh two factors:
1. Near-term risks: Mexico’s recovery timeline and regulatory outcomes could swing earnings dramatically.
2. Long-term bets: Chile’s 5G push and broadband expansion offer scalable growth, while cost controls (capex cuts, currency hedging) buffer against volatility.

With the stock trading at a forward P/E of 12.5x (vs. sector average 14x), AMXOF appears priced for caution. However, a Mexican rebound and successful regulatory navigation could unlock 20-30% upside. For now, this is a hold—a stock to watch as Latin America’s economic tides turn.

In conclusion, América Móvil’s Q1 results are a reminder that in telecom, diversification and agility are survival tools. With its postpaid and fixed broadband engines firing on all cylinders, the company has the tools to navigate storms—but investors must keep a wary eye on Mexico’s recovery and regulatory battles. The path forward is clear, but the journey won’t be smooth.