America Movil is to drop its investment in Telekom Austria by 7.8 per cent, while its Q2 results showed the negative impact of competition in its home market.

The company agreed to sell 7.8 per cent of the voting stock in Telekom Austria to the market. This sale will reduce its stake in the Austrian operator from 59.70 per cent to 51.89 per cent.

When America Movil became the majority owner of Telekom Austria in July 2014, it pledged to increase the free float of the Austrian operator within two years, according to recent comments by the head of state holding company, OBIB.

Releasing the current stake will increase Telekom Austria’s free float to about 20 per cent from about 12 per cent today. OBIB holds the remaining 28.4 per cent stake.

Revenue up, profit plummets
Group revenue rose 6.1 per cent from the year-earlier quarter to MXN233 billion ($12.7 billion), with service revenues increasing 3.2 per cent as mobile revenues increased 5.5 per cent and fixed-line revenues 7.4 per cent.

These increases reflect the appreciation of several currencies against the Mexican peso in the period, particularly the Brazilian real and the Colombian peso. At constant exchange rates service revenues were down 2.1 per cent year-on-year.

However, competition bit hard in its domestic Mexican market, where service revenue fell by 11 per cent and mobile service revenue was down a painful 17 per cent, mainly because of reduced prepaid revenue. The company saw “more aggressive commercial plans in the prepaid segment as a greater part of our subscribers moved towards unlimited call plans”.

The revenue losses at home were the main factor behind an 11 per cent decline in Ebitda, as well as a 29 per cent fall in operating profit.

America Movil’s net profit was MXN7.7 billion in the second quarter, down 45 per cent from the year before.