Mexico’s America Movil is feeling the strain from greater competition, and more intense regulation, in its backyard.

According to its Q1 results, the company’s domestic operations saw revenue decline by 2.6 per cent to MXN65 billion ($3.7 billion), while Ebitda fell dramatically by 17 per cent to MXN23 billion (the company only supplies net income at group level).

Service revenue in Mexico was down 8 per cent mostly as a result of lower mobile voice revenue following the introduction of more competitive plans and the impact of Easter Holidays, which fell in March rather than April this year.

Local unit Telcel is now facing greater rivalry from the likes of newcomer AT&T, as well as Telefonica.

In addition, currency volatility also had an impact on its financials, making it harder to manage the sale of dollar-based products, such as handsets.

Domestic earnings were also dampened by having to make payments to towers firm Telesites, which was not the case a year ago. The towers firm was spun off from America Movil in 2015 in response to regulatory pressure.

News from Brazil was not much rosier with revenue flat compared to 2015. Data and cable television revenue growth were high points but cancelled out by falls in equipment revenue and voice revenue, the latter because of a reduction in the mobile termination rate.

Brighter news came from the unit serving Argentina, Paraguay and Uruguay, with a strong performance from both mobile and fixed businesses.

At the group level, America Movil saw first quarter revenue edge up by 1.4 per cent to MXN223 billion ($12 billion). Service revenue was virtually flat, reflecting tougher competition as well as sharp reductions in interconnect rates.

Net profit sunk to MXN4.8 billion ($277 million), a 42 per cent fall.