Wednesday, November 14, 2007

TELMEX to Spin Off Latin American Operations

TELMEX announced plans to spin off all its Latin American businesses and its Mexican yellow pages business, which already has an international presence, to a new holding company to be called TELMEX INTERNACIONAL.

TELMEX has international subsidiaries in Argentina, Brazil, Chile, Colombia, Ecuador and Peru.

TELMEX said it also plans to refocus its operations in the Mexican telecommunications market, distinguishing its operations in the middle- and high-revenue markets, in which there is competition, from the low-revenue and rural markets, in which there is no competition.

As of September 2007, the number of TELMEX lines in service in Mexico reached 18.2 million, located in more than 22,880 communities. Of these lines, approximately 9.8 million are in areas served by competition, in which numerous competitors have offered telecommunications services for the last 11 years. In contrast, 8.3 million lines are located in communities in which no competition exists or are rural areas located in more than 20,930 communities, and these customers generate revenues of approximately P.17,500 million, EBITDA of P.3,000 million and an operating loss of P.1,980 million.

As a result, TELMEX has decided to separate the operation and marketing of its services in these communities, in order to address their particular needs and monitor their development. For that purpose, TELMEX has created a new business unit focused on the oversight and operation of these services.

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