America Movil’s Q1 Surge: Navigating Growth Amid Regional Shifts

America Movil SAB de CV delivered a robust 14.1% year-on-year revenue surge in Q1 2025, reaching 232 billion Mexican pesos, fueled by strategic bets on postpaid subscribers, fixed broadband, and regional diversification. While economic headwinds in Mexico and Brazil tested its prepaid business, the telecom giant is positioning itself to capitalize on structural shifts across Latin America. Here’s why investors should pay attention to its growth playbook—and where the next opportunities lie.

The Postpaid Pivot: A Recipe for Resilience

The company’s shift toward high-margin postpaid services has been a linchpin of its success. Across all regions, postpaid subscribers rose by 2.4 million, with Brazil alone adding 987,000—a stark contrast to prepaid declines driven by economic softness and MVNO competition. Mexico, despite losing 831,000 prepaid users, saw postpaid gains of 133,000, underscoring the value of retaining higher-spending customers.

This strategy is paying off: postpaid ARPU remains stable, even as prepaid ARPU fell due to aggressive promotions from MVNOs like Byte. Management’s focus on retaining premium prepaid users and scaling postpaid plans is likely to stabilize margins as promotional cycles wane.

Regional Bright Spots: Where the Growth Is

While Mexico’s economy sputtered, other markets proved dynamite:

1. Brazil: The largest postpaid contributor, Brazil’s wireless segment thrived despite prepaid losses. PayTV revenue also showed surprising resilience, declining more slowly than feared.
2. Colombia: Wireless revenue jumped 8.3%, fueled by postpaid gains and fixed-broadband expansion (134,000 prepaid and 52,000 broadband additions). Even with margin pressure from CapEx, Colombia’s EBITDA rose 2.4%.
3. Central America & Eastern Europe: These regions outperformed expectations, with broadband additions and improved PayTV revenue.
4. Chile: A new frontier. Post-acquisition investments in 5G and fiber are laying groundwork for long-term dominance. Management’s 3–5-year plan here signals confidence in capturing share from rivals like Telefónica.

The Currency Tailwind—and Risks Ahead

Currency fluctuations added a boost: the Brazilian real, Colombian peso, and Chilean peso all strengthened against the Mexican peso, inflating revenue when converted. Yet Mexico’s peso remained stable due to U.S. tariff concerns—a double-edged sword.

Risks persist. Mexico’s private consumption dropped 1% year-on-year, and regulatory changes could disrupt competition. MVNOs like Byte continue to erode prepaid margins. Still, CFO Carlos García Moreno sees Q1 as the “bottom” of the cycle, with recovery likely in H2 2025 as USMCA trade benefits and lower interest rates kick in.

Why Now Is the Time to Invest

• Cost Discipline: CapEx fell to 6.7 billion pesos, reflecting smarter spending on high-ROI projects like 5G and fiber.
• Strategic Acquisitions: Chile’s growth potential is unlocked by recent deals, while openness to further M&A could amplify scale.
• Structural Shifts: Broadband and postpaid penetration rates across Latin America remain below developed markets, offering years of runway.

The Bottom Line

America Movil’s Q1 results reveal a company thriving by leaning into postpaid and fixed services while hedging risks through regional diversification. With a clear roadmap to capitalize on 5G, fiber, and market consolidation, the stock presents a compelling entry point—provided investors can stomach near-term economic volatility. For those willing to look past short-term headwinds, this is a play on Latin America’s digital future.

Act now, or risk missing the next wave of growth in one of the world’s fastest-evolving telecom markets.