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America Movil seen posting jump in Q4 net

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CIOL Bureau
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MEXICO CITY: Latin American cellphone heavyweight America Movil, controlled by tycoon Carlos Slim, is expected to post stronger operating profits in the fourth quarter after it spent less to win new clients across the region.

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America Movil is seen having a net profit of 20 billion pesos ($1.5 billion) in the October-December period, up 24 percent from the year before, according to the average estimate of five analysts consulted by Reuters.

Operating profit likely rose 18 percent to 28 billion pesos as America Movil invests less in subsidized handsets and promotions to attract new clients.

After a decade of explosive expansion, wireless operators in Latin America are tapping fewer and fewer new subscribers and are turning to additional services like Internet access to fuel revenue growth.

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America Movil, due to report on Tuesday, may have added 5.6 million new customers in the fourth quarter, down 45 percent from gains in the same quarter of 2008, its busiest ever.

"We expect one more quarter of strong EBITDA growth, ...backed by the estimated curbing of subscriber acquisition costs," said Santander analyst Gregorio Tomassi in a report.

As Mexico and other countries in Latin America emerge from an economic downturn, America Movil's sales are expected to rise 9 percent in the quarter compared with the year-ago period.

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Reacting to tougher competition in the region, Slim this month unveiled a $21 billion plan to shift control of his Mexican fixed-line operator Telmex and regional fixed-line operator Telmex Internacional into his flagship America Movil.

Slim plans to absorb Telmex Internacional into America Movil and delist the fixed-line operator from the stock exchange.

Telmex, which boasts around 80 percent of Mexico's fixed-line market, would be controlled by America Movil but the two companies would remain separate entities.

America Movil's clients in Brazil account for about 20 percent of its market across North America and South America, with Mexico accounting for 30 percent.

America Movil has operations in 18 countries across North and South America, and the Caribbean, and competes heavily against Spain's Telefonica.

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