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Vodafone CEO says unlikely to look at America Movil Mexico assets

Published 16/07/2014, 11:45
Vodafone CEO says unlikely to look at America Movil Mexico assets

By Kate Holton

LONDON (Reuters) - Britain's Vodafone (L:VOD) said it was unlikely to be interested in telecom assets being put up for sale in Mexico by tycoon Carlos Slim's America Movil (MX:AMXL) since a deal would not fit with its focus on the corporate market in Latin America.

America Movil has pledged to sell unspecified assets, which analysts say could include mobile subscribers and spectrum, to cut its market share in Mexico below 50 percent and escape tougher regulations.

Slim said in an interview with Reuters last week that the group would aim to sell an "attractive" cross-section of the company to attract a buyer that was not already present in Mexico.

The announcement has set off speculation as to which global telecom companies might make a move into Mexico, with analysts listing AT&T (N:T) and Vodafone as possible contenders.

Asked if Vodafone was looking at Mexico, Chief Executive Vittorio Colao told Reuters at an event late on Tuesday: "I doubt it to be honest; it's not an area we're working on".

"We are going into new areas of the world, but just to serve our enterprise customers," said Colao, referring to Vodafone's business selling communication services such as cloud computing and global mobile plans to multi-national corporations.

Colao said the business model in Vodafone's enterprise unit was to partner with local carriers in markets where the company was not present, or to rent space on a local network.

Vodafone, the world's second-largest mobile operator, owns its own networks across Europe where its biggest market is Germany, as well as emerging markets, but has not traditionally been a player in Latin America.

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"I have to put my money into India, into Europe and into Africa. That is where the money is going," said Colao.

In February this year, Vodafone completed the sale of a stake in U.S. carrier Verizon Wireless (N:VZ) for $130 billion, which has enabled it to return cash to shareholders and invest in its remaining businesses.

As part of the programme, it has snapped up fixed-line assets in Spain and Germany to offer more services to customers.

Shares in Vodafone are down 20 percent since the start of the year due to tough trading in its core markets, waning speculation that AT&T would consider a bid for the British group and as investors sold their stock following the return of cash from the U.S. exit.

In Mexico, America Movil controls some 70 percent of the mobile market, far ahead of rivals Telefonica (MC:TEF) and Iusacell, and also holds 80 percent of the fixed-line business.

(Reporting by Kate Holton; writing by Leila Abboud; editing by Tom Pfeiffer)

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