America Movil SAB de CV

BMV:AMXB

Earnings Call Analysis

Solid Subscriber Growth and Financial Stability Despite Challenges

America Movil's second quarter of 2024 showed solid subscriber growth with 2.4 million net additions, including 1.8 million postpaid subscribers driven by strong performance in Brazil. Broadband accesses increased by 376,000, yet PayTV and voice lines experienced declines. Total revenue grew 1.5% year-over-year to MXN 206 billion, with service revenue up 3.5%. EBITDA rose by 5.6% to MXN 83.1 billion, improving margins by 1.5 percentage points. Despite operational successes, foreign exchange losses due to the Mexican peso's depreciation resulted in a net loss of MXN 1 billion for the quarter. The company continued solid cost control, investment in network expansion, and significant share buybacks.

Introduction and Key Players

America Movil's second quarter of 2024 was discussed in a recent earnings call, led by key executives including CEO Daniel Hajj, CFO Carlos Garcia Moreno, and COO Oscar Von Hauske. The company presented a mixed performance with strong growth in some areas and challenges in others.

Subscriber Growth

The company added 2.4 million new subscribers in the quarter, with a significant 1.8 million in the postpaid segment. Brazil was the standout contributor with roughly half of these additions. Other regions showing strong performance included Colombia with 183,000 new subscribers and Mexico with 99,000. Prepaid additions were also notable, though smaller, with 599,000 net additions, predominantly from Colombia and Argentina.

Revenue Performance

Total revenue for the quarter stood at MXN 206 billion, a modest increase of 1.5% year-on-year. Service revenue saw a healthy growth of 3.5%, while equipment revenue experienced a decline of 9.8%. At constant exchange rates, service revenue grew by 4.7%. This growth was partly driven by a faster increase in mobile service revenue, which accelerated to 5.1%, and a strong performance in fixed broadband services with a growth rate of 7.9%.

EBITDA and Profit Margins

EBITDA reached MXN 83.1 billion, up 5.6% in Mexican peso terms, and 6.9% at constant exchange rates. The EBITDA margin improved to 40.4%, a 1.5 percentage point increase from the previous year. This improvement was attributed to the company’s greater operating leverage and stringent cost controls. Operating profit also rose significantly, up by 12.9% to MXN 46 billion.

Cash Flow and Share Buybacks

America Movil generated a free cash flow of MXN 10 billion, which was MXN 10 billion greater than the first half of 2023. This increase was partly due to reduced capital expenditures, down by MXN 8 billion. The company also executed share buybacks worth MXN 12.5 billion, a significant increase compared to MXN 3 billion in the first half of 2023. Consequently, the leverage ratio declined to 1.38x EBITDA from 1.5x in the previous quarter.

Impact of Currency Fluctuations

The quarter was marked by significant foreign exchange losses, primarily due to the depreciation of the Mexican peso. These losses impacted the comprehensive financing costs, which reached MXN 40 billion. Despite this, the company managed to maintain a strong operational performance.

Challenges and Market Dynamics

Prepaid revenue showed signs of deceleration, a trend observed across Latin America, not just within America Movil. The transition of prepaid customers to postpaid plans, driven by better data offerings and newer handset models, partially offset this trend. Additionally, economic conditions in various regions significantly influenced prepaid performance.

Geographical Performance

In Brazil, the company reported robust growth in both mobile and fixed-line revenues. Mobile revenue growth was particularly strong, driven by market share gains and effective cost controls. Inflation remained a factor, but the company effectively managed cost increases. Mexico also showed promise, particularly in the broadband segment, despite a slight drop in fixed broadband net additions from the first quarter due to installation slowdowns and higher churn.

Future Outlook and Strategies

Looking ahead, America Movil plans to continue growing its broadband market in Mexico and believes that the overall performance in 2024 will surpass that of 2023. The company is also exploring opportunities in artificial intelligence to improve efficiency and customer experience, though these initiatives are in early stages and expected to develop over the coming years.

Earnings Call Transcript 2024-Q2

[Operator]

Thank you for joining America Movil's Second Quarter 2024 Conference Call and Webcast. [Operator Instructions]

Good morning. My name is Kiki, and I will be your conference operator today. At this time, I would like to welcome everyone to the America Movil's Second Quarter 2024 Conference Call and Webcast. [Operator Instructions]

Now I will turn the call over to Ms. Daniela Lecuona, Head of Investor Relations. Daniela, please proceed.

[Daniela Lecuona, executive]

Good morning, everyone. Thank you for joining us today for the second quarter results. We have on the line Mr. Daniel Hajj, CEO; Mr. Carlos Garcia Moreno, CFO; and Oscar Von Hauske, COO.

[Daniel Hajj Aboumrad, executive]

Thank you, Daniela. Welcome, everyone, to America Movil's Second Quarter of 2024 Financial and Operating Report. Carlos is going to make a summary of the results. Carlos?

[Carlos Jose Garcia Moreno Elizondo, executive]

Thank you, Daniel. Good morning, everyone. Well, the second quarter of the year started with an important session long-dated U.S. treasury yields with those in the 10-year tenor advancing 50 basis points in April on the back of unexpectedly strong employment figures. They remain volatile throughout the quarter closing June at 4.40%, practically the midpoint of the range in which they traded throughout the period. The Mexican peso, which had withstood well the U.S. interest rate volatility, weakened sharply following the Mexican presidential elections on June 2. After months of appreciating vis-a-vis not only the U.S. dollar, but also practically all the currencies in our region of operation in Mexican peso was to depreciate against all.

We added in the quarter 2.4 million subscribers, of which 1.8 million were postpaid, with Brazil contributing roughly half, Colombia 183,000 and Mexico 99,000. The numbers you see for Austria also include [indiscernible] machine-to-machine. In our prepaid platform, we registered 599,000 net additions, with Colombia gaining 261,000 subscribers followed by Argentina with 191,000.

In the fixed-line segment, we obtained 376,000 broadband accesses, including 148,000 in Mexico and approximately 63,000 each in Argentina and Brazil. Voice lines and PayTV units registered losses in the period and were down 63,000 and 56,000, respectively. Our postpaid base increased 6% year-on-year, with prepaid expanding 1.6% and fixed broadband accesses 4.9%, they were the second more dynamic access line.

Our second quarter revenue, MXN 206 billion, was up 1.5% from a year before, with service revenue expanding 3.5% and equipment revenue falling 9.8%. At constant exchange rates, service revenue increased 4.7% year-on-year, practically the same pace it had maintained the prior quarter, but with slightly faster mobile revenue growth and somewhat slower fixed-line revenue growth, and that helped bring about a 6.9% increase in EBITDA. The greater operating leverage is stemming from positive revenue growth on both platforms have been the main driver of EBITDA growth, obviously, coupled with strong cost controls.

Mobile service revenue accelerated to a 5.1% pace from 4.9% the preceding quarter on the back of stronger postpaid revenue growth as prepaid revenues stayed on pace. On the fixed-line platform service revenue growth decelerated to a 4.1% pace from 5.1% the prior quarter, basically on account of corporate networks revenue, which have seen a big jump then. Broadband revenue growth continued to improve, reaching 7.9%, up from 6.4% in the first quarter, and corporate networks revenue increased 7.2%. The prior quarter, it has seen a 13% jump on account of some extraordinary contracts that have been obtained. It is important to note that fixed broadband revenue consolidated has come to be nearly 25% higher than the combined PayTV and fixed-voice revenue.

EBITDA totaled MXN 83.1 billion in the quarter which represented a 5.6% increase in Mexican peso terms from the year earlier quarter and 6.9% at constant exchange rates, as seen before. The consolidated EBITDA margin reached 40.4% in the quarter, that was 1.5 percentage points improvement from a year before, again on great operating leverage and solid cost controls. Our operating profit came in at MXN 46 billion, having risen 12.9% from the year-earlier quarter, but our comprehensive financing costs reached MXN 40 billion on account of foreign exchange losses resulting mainly from the depreciation of the Mexican peso. And because of this, we ended up posting a net loss of MXN 1 billion in the quarter.

I have to say that at the end of May, prior to removing the peso, the 2/3 of our net debt were Mexican peso based. In cash flow terms, our net debt increased by MXN 14.3 billion and together with MXN 57 billion in operating cash flow allowed us to COVID CapEx totaling MXN 56 billion. Share buybacks in the amount of MXN 12.5 billion and labor obligations for a similar amount, that's in the month of June.

Now our free cash flow was MXN 10 billion greater than that of the first half of 2023, partly because of lower capital expenditures, which were down MXN 8 billion. Our share buybacks in the period were 4x the one a year before. We went from MXN 3 billion in the first half of 2023 to MXN 12.5 billion in share buybacks in the first half of 2024. Our leverage ratio came down to 1.38x EBITDA from 1.5x in the prior quarter.

So that's the summary. And I will turn the floor back to Daniel for Q&A. Thank you.

[Daniel Hajj Aboumrad, executive]

Thank you, Carlos. And please, we can start with the Q&A.

[Operator]

[Operator Instructions] Your first question comes from the line of Leonardo Olmos almost from UBS Company.

[Leonardo Olmos, analyst]

So we have two. The first is, can you break down the FX losses in this quarter? I know there's unusual -- usual behavior. But considering what you just said about 2/3 of net debt being in peso paid, how should we forecast this line, the FX losses in correlation with the Mexican peso? That's the first question. The second one completely unrelated. Across LatAm, we're seeing prepaid decelerating, not only AMX, but its competitors as well. Do you expect prepaid revenue to return to growth at some point?

[Daniel Hajj Aboumrad, executive]

Well, Carlos can start with it.

[Carlos Jose Garcia Moreno Elizondo, executive]

Okay. On the FX side, as I said, 2/3 of the net exposure in pesos. But the net exposure you get to after using derivatives and the impact of derivatives is different from the results from the one that you get from the actual FX movements or FX gains or losses on the underlying debt, okay? So there are differences there. We can guide you through them. But it's not easy to predict how those movements can take place.

Then there's a portion of our overall debt, which has to do with intercompany transactions, and they basically wash all of them. We retain a certain exposure to real, okay? And in this quarter, we had depreciation of the peso, but also [indiscernible] And that's what resulted in this, okay? But that's basically you have -- there's a little bit of noise in the results associated with the underlying deposition that's been all the case.

[Daniel Hajj Aboumrad, executive]

Well, on the second question on the prepaid that's accelerating, I think the prepaid is related and in each country, it's a little bit different. What we can see in all the countries is that some prepaid customers are moving to postpaid. So they are getting -- as we are moving to 5G and giving some more data, better handsets, so they are moving to being a postpaid customer, so that's one thing.

The second very important is depending on the economy of the country. So prepaid is a lot related on how the economies are doing and spending on the people on that. So that's more or less what you have been seeing all around Latin America, people moving to postpaid from prepaid to postpaid. And depending on the economies also, we can see if they are going to spend more or not also some promotions in some countries that we are seeing all around. So that's more or less.

And just to go back on the FX question, there is a very comprehensive information that is sent over to the Mexican, both are available to all the analysts and investors. And you have all the details of the underlying debt positions and the underlying derivatives position.

[Operator]

The next question come from Walter Piecyk.

[Walter Piecyk, analyst]

I guess first question just in general on ARPU growth. I know I kind of ask this every quarter, but I just always want to check in on it. It seems like it's sustaining. And again, I'm primarily interested, I guess, in Mexico, Brazil and Colombia. When you look out over '24 and '25, do you see the trends of usage or perhaps maybe price alterations continuing to sustain that growth in the average revenue per user.

[Daniel Hajj Aboumrad, executive]

Well, it's -- we have been seeing that for the last 2 years since we have been putting 5G and the customers are using more, doing more applications. They are moving to better plans. So that's more or less what the ARPU. The ARPU is moving and increasing because 2 things. So the customer is moving to a better plan, so they are a little bit more of the rent with more for more data, but you pay a little bit more, and then I give you more. So that's one thing.

And the second is you are staying in your plan, but you are consuming more. And you are consuming more because, let's say, in Mexico we have more than 10 million customers in 5G, we have been developed this networks all around and people is using more data. So that's more or less what we have been seeing. So more things that people is doing online. They are using more the phone, and that's what is happening, I hope, and I think that for '25 and '26 or '24 and '25, we're going to still seeing that trend.

[Carlos Jose Garcia Moreno Elizondo, executive]

I think the average quarterly growth in ARPU in Mexico is 3.3% per quarter. That's for the last 5 quarters. And in Brazil, it should be in the range of 6%.

[Walter Piecyk, analyst]

I'm sorry, say again, that you think it should be in the range of 6% going forward?

[Daniel Hajj Aboumrad, executive]

No, it's what we had [indiscernible] the last 5 quarters.

[Walter Piecyk, analyst]

Yes, yes, of course. And then just on equipment revenue, alternatively, that didn't look as high. You report churn so we can see gross adds. So it doesn't seem like it's gross additions that's impacting that. It must be just other equipment revenue upgrades or maybe whatever accessories and things that you sell in the stores. But just if you could give us a sense of what you're seeing in terms of phone purchases? And do you think -- or do you anticipate that may change with the release of the new AI services on the iPhone and Samsung and other devices?

[Daniel Hajj Aboumrad, executive]

What you've seen, let's say, equipment revenue, where you see that we have a big decline is in Mexico, 14%. And it's really because we are only reducing 5% in units. The rest is that people is buying let's say, not cheaper form, so the phones have been reducing prices and we have -- we used to have 5G phones at $300, $400. Today, we have 5G phones at $200. So people is buying cheaper phones with the same -- the phone is a very good phone, good camera, a lot of good chips. So people is looking and reviewing a little bit in more detail, which phone is buying. So we have 5% decrease in units, about 14% decrease in equipment revenue in Mexico. So that's more or less what the trend and what is happening right now. People is using...

[Walter Piecyk, analyst]

Daniel, do you think that changes...

[Daniel Hajj Aboumrad, executive]

Better phones and the cheaper phones.

[Walter Piecyk, analyst]

Understood. But going forward, there's a lot of hype -- interest in what Apple has recently announced. And obviously, Samsung has also added some AI features. Do you think that trend you saw this quarter will reverse and do something different at the end of this year and into 2025?

[Daniel Hajj Aboumrad, executive]

Well, I think AI is going to be very important. It's -- what Samsung is doing in their phones because they already have in some phones the AI application. Still with iPhone, it's only the announcement that they had. But I think that will be about -- at the end of the day, I think the AI application in my view is going to have all the phones again, not only the high-end phones, the mid-end phones are going to have also this application.

So that's the trend, everything starts at the high end and moving to the mid and let's say, low. So I think, yes, the trend at the beginning will again make people buy more the high end. But as the applications moving to other phones, then people is going to choose the best phone at the best price.

[Operator]

The next question we've got is from Vitor Tomita from Goldman Sachs.

[Vitor Tomita, analyst]

I have two main questions from my side. The first one is, if you could give an update on how you are thinking about your share buyback strategy for the second half of the year following what we understand was an acceleration in the second quarter? And my second question would be on Chile. If you could give any additional color on the competitive environment there, noticed and cited in their earnings release that client base mobile and fixed have been going over the last 12 months. So wanted to understand better how you are thinking about the commercial approach and competition in there?

[Daniel Hajj Aboumrad, executive]

Where -- in Chile? On the buybacks.

[Carlos Jose Garcia Moreno Elizondo, executive]

On the buybacks, Vitor, we mentioned repeatedly, typically, we pace the buybacks so that they are more closely related with our cash flow. Our cash flow is very, very cyclical, very seasonal with the first half of the year requiring a lot of working capital, which we head back into second half of the year. That's why the second half of the year when we make the payments of dividends. But that is also when -- if you look back [ 12 ] years, we typically have a great amount of share buybacks in the second half than in the first half.

But yes, generally, I'd say that these distributions will be matching closely the free cash that the company has to the extent the company does not divert cash to M&A, which is not going to be the case and to the extent that the company does not require any more CapEx, which is not going to be the case.

[Daniel Hajj Aboumrad, executive]

Yes. On Chile, what -- I think everybody knows that Chile is a difficult market. It's a very competitive market. And what happened? We started in '22 with Liberty, and we defined a plan -- a 3-year plan on synergies, on reducing cost, integrations, better infrastructure. We just -- we closed 1 year ago a good deal with 5G, 4G, 3G, more coverage. We are doing a lot more redundance and fiber through all the country. We closed a capacity agreement with OnNet also to move part of our subscribers to fiber. So we have a 3-year plan. I think we are on target. We still need end of '25, '26 to review that.

But overall, we are comfortable on that. On the -- we have to put new management since the beginning, we integrate the management. So we are working hard. So -- but it's not something that is from today for tomorrow. It's a good 3-year, 4-year plan that we have been doing the same that we do in Brazil when we integrate the companies and in other countries. So we're comfortable. It's a very competitive market. And well, it's 4 players market -- no, 4 players in mobile, maybe more players in peak.

So -- but we are comfortable on what we're doing, and we think in the next -- in the future, Chile is going to be very good country for us. We have the size right now because before doing the merge, we only have mobile revenues not so high. So today, we are more than $1 billion company. I think it's $1.2 billion. So we can work on that. We have the size, and I think we're going to be successful in Chile.

[Operator]

The next question comes from Phani Kanumuri from HSBC.

[Phani Kumar Kanumuri, analyst]

My first question is regarding Mexico mobile revenues. Now it has decelerated from 5.8% in 1Q to 4% in 2Q. Is there any specific reason for this trend? And how do you expect this trend going forward? My second question is regarding further extension on Chile. Do you have any plans to do any kind of M&A in Chile? You have said in your Capital Markets Day that you don't have any major M&A plans. But with Chile consolidation, do you see further any plans of M&A in Chile?

[Daniel Hajj Aboumrad, executive]

Well, first, in Chile, everybody knows that WOM is in Chapter 11. And there are plans I don't know if there's going to be M&A or not. We are open to see alternatives, but we don't know exactly what we're going to do. So as always, we are open, but we are working very strong in the synergies and all the implementations in new infrastructure, fiber, 5G, more capacity, more coverage, all around. So that's our focus, but we are open to see what the alternatives are with WOM now, so that's first.

Second, in Mexico, I think that the trend is going, the revenue has declined -- not declining, reducing the growth. I don't know what's going to be the next. But in Mexico, we are doing very good in 5G. I think we are the only company who has a real 5G network with coverage, with capacity. In postpaid, a lot of our subscribers are renewed in 5G plan that it give us a good ARPU there. So as Carlos is saying, it's 3.3% increase on ARPU. We haven't increased any price in many of the segments that we have.

So it's only moving to be a higher plan or people consuming more as we are seeing. So we have also, as in other countries, a lot of competition, promotions. And we don't know exactly what's going to be on competition and promotions for the future, but we are ready to compete, and we have the strong basis, good distribution network. We have good customer care people, a lot of centers, a lot of stores and very good network and very good coverage and quality. So we are ready to compete. If there's still a lot of promotions, we can compete on that and the market will be more rational, then we can also be more rational. So we are ready to compete in the future in Mexico. We're prepared, let's say, to compete.

[Operator]

The next question comes from Lucca Brendim from Bank of America.

[Lucca Brendim, analyst]

I have two from my side here. The first one, in Colombia, we saw some developments from the main competitors in recent quarters. And I want to know if this is already reflecting in some way to the competitive environment, if you're really seeing some changes in it and how do you expect this market to behave going forward? And then second, on Mexican, for the fixed business, can you give us more color on how you're seeing competition? You have not raised prices in Telmex, but is there room for price hikes in the future in the coming quarters, years? So if you could give us some color on that as well?

[Carlos Jose Garcia Moreno Elizondo, executive]

Well, in Colombia -- what happened in Colombia. I think in Colombia, 2 years ago, we have a new entrants that was WOM, very aggressive plans. So everybody has to compete in the market. So this competition reduces the growth and the ARPU that we have been having because people -- if you give more data then people sometimes prefer to reduce their plan and stay and have more data in contrary than increasing plan for more data. So it was a very aggressive entrant on WOM, but we compete on that.

But today, it's a little bit different. WOM is having some problems, and we're still competing. We increased 5G. 5G is giving us in Chile a very good customer. We have been growing. We grow more than 100,000 customers in postpaid -- in Chile this quarter in postpaid. So we're starting to do better, and we're confident. We have a very good company, as I told, very good basis also in Chile, good distribution, a lot of stores, good network, 5G. We have the biggest 5G network capacity, and that's what we have seen.

So I think we can see more improvements. I hope we can still this trend of improvements in Colombia for the rest of the year. So that's what we're thinking to have. And Mexico, in the fixed, Oscar can talk a little bit. We are not planning to increase plan prices at this moment. So we're going to stay with these prices. And we are doing good. We are growing in the broadband and in the corporate. And we already do a lot of fiber through Mexico. So we have a good fiber network coverage, and we're growing in Mexico.

[Operator]

The next question comes from Carlos Legarreta from Itau.

[Carlos Antonio de Legarreta Diaz, analyst]

I have two questions on this side. The first one is a follow-up in Mexico fixed broadband. I'm wondering if you can talk about the net additions that you're seeing. It's obviously a very good volume. But I'm wondering if it's mostly migration from your copper to your fiber product or you're actually acquiring new customers as well? Perhaps Oscar can talk about that.

And on the second question, just to follow up on Chile, just to make it clear. The information that you provide is very clear. Obviously, [indiscernible] that the leverage level. But I'm wondering if there's any kind of contribution that you need to make. Obviously, now you will control the company after this debt conversion. But I was under the impression that the equity injection was actually necessary for that company, and it was relatively sizable up to -- so I'm just wondering if -- what are the plans in terms of equity or CapEx for the Chilean subsidiary now going forward?

[Daniel Hajj Aboumrad, executive]

Well, Oscar can talk a little bit on Mexico. But just to clarify, the 150,000 that we have are new subscribers. So we have a lot of our subscribers moving from copper to fiber, but 150,000 are new subscribers in the network. So Oscar can talk on....

[Oscar Von Hauske Solís, executive]

You're total, right? Migration, it doesn't count as a net adds. So all the net adds are new customers. The migration, we don't count as a net adds.

[Daniel Hajj Aboumrad, executive]

And we have been moving a lot of copper to fiber.

[Carlos Jose Garcia Moreno Elizondo, executive]

Yes, 84% of the customer base is already in fiber.

[Daniel Hajj Aboumrad, executive]

So people is okay. We have a good brand. And we have also very good quality and support. And I think what we're aiming and trying to do is to recuperate part of the market that we used to have. So we are working on that.

[Carlos Jose Garcia Moreno Elizondo, executive]

Yes, another thing just to add is that we've been working in the bundles of streaming video with the customers and has been very well received in the market. So we include the different add-ons like Netflix, HBO, et cetera, in this wonderful program, which has been working pretty well.

[Daniel Hajj Aboumrad, executive]

And on Chile, let me explain to you since the beginning, when we do the merge, we make a plan. And in that plan, we incorporate some cash in the company. So we need to put cash -- to put equity in the company, of course, the company needs equity. And in that plan, we think that's why we do the agreement with Liberty to put cash for CapEx and part of the debt that we put in the beginning also to be contribute as equity in Chile. That's what we decided to do since the beginning, and well, Liberty has the right to catch up all this -- what we -- all this plan -- let's say, all this plan. And unfortunately, they don't catch up.

They decided not to do it, and that's what we are. And we are comfortable with the equity, the way financially the company is going to end -- doing. At the end of this year, I think, financially, the company is going to be good. And the operations that is something that is very important, the operations, CapEx, investments and new networks, I think, are under the plan that we decide.

[Oscar Von Hauske Solís, executive]

I think that going forward, Carlos, we don't expect any major cash injections into Chile. I think the CapEx was to be almost fully funded by their own EBITDA. So it's going to be practically self sufficient the -- the equity contributions have basically taken place in early phase, maybe over the next couple of years, we will be having a company with fully self sufficient, right?

[Daniel Hajj Aboumrad, executive]

I think what you could see is this agreement to capitalize the company, I think at the end of '24, we're going to have the company fully capitalized. And with all the investments in place to do and to have a very strong infrastructure capacity, coverage, quality company stand with a very good team in place.

[Operator]

[Operator Instructions] The next questions come from Daniel Federle from Bradesco BBI.

[Daniel Federle, analyst]

The first one is a follow-up on the Mexico broadband business. RGU, net additions were good in the second quarter, but significantly lower versus the first quarter. So my question is what has changed in the market from the first quarter to the second, which level is like the sustainable level going forward?

And the second question is related to Brazil. Brazil was a very strong region, especially in the mobile front. The company has been presenting like an acceleration in mobile services revenues growth. My question is, do you see room for further acceleration in the upcoming quarters? And I was wondering if maybe like growth in the second quarter would have been helped by any kind of mismatch in terms of the timing of price increases. I don't know if you are increasing prices earlier this year versus last year, and that has helped -- helping out, that's my question.

[Daniel Hajj Aboumrad, executive]

Sorry, the first question was on the fixed broadband in Mexico in Telmex. And about the second question, which countries you are talking? We don't hear you very well.

[Daniel Federle, analyst]

Exactly. The first question is regarding Mexico RGUs that were good, but lower than in the first quarter. What has changed from one quarter to the next. And the second quarter is related to Brazil because mobile services revenue growth has been accelerating. So I'm asking if do you see room for further acceleration? And if second quarter could have been helped by any kind of mismatch in terms of the timing of price increases, like increasing prices earlier this year than last year? Those are my questions.

[Daniel Hajj Aboumrad, executive]

I'm going to start on Brazil. I think, in Brazil, we have a very good quarter in terms of revenue -- in terms of mobile revenue. Also in terms of fixed revenue, we have been increasing. I think we increased the revenue in Brazil. So it's been a good increase in revenue in peak. So we start to see like a couple of quarters increasing broadband and growing net adds and decreasing less in TV and fixed. So that's what we're seeing in Brazil.

Also in mobile, we have good increases, but there's still a lot of competition. So Brazil is very big. So you can see in some states -- some places very strong promotions. In other ones, less promotions. But all overall, in Brazil, it's not only price. I think we have been also controlling costs a lot. You see that the EBITDA is growing more than the revenue. So all the synergies, the investments, systems, digitalize, everything that we have been doing is giving us good results in terms of costs.

Still in Brazil, inflation is at 4%, 5%. So you have to increase in some -- we have some costs to increase every year since that inflation. So we have been able to control that. And we are growing also in market share in mobile, and that is giving us this growth. So I think, in mobile, the growth that we have been having will be great if we can sustain that and maintain that level of growth in Brazil. So for me, Brazil -- and not only Brazil, I think operational, all overall in all the countries, we have been doing good in America Movil. Carlos has been showing, but we have been growing more than what we said and also reducing cost, doing synergies and increasing our EBITDA, mainly in all the markets.

In Mexico, Oscar, it's difficult to explain why we have been having more than 300,000 net adds in first quarter and then 150,000. But in my view, we're going to still grow, and we are already with good fiber capacity and coverage, and we're going to still grow in the broadband in the next month. So we cannot say quarter-by-quarter exactly how much we're going to grow, but the trend is to grow in Mexico in the broadband market. So Oscar?

[Oscar Von Hauske Solís, executive]

I totally agree what you say. On the second quarter, we have a decrease in the productivity and installation issues because the climate was really bad on that time. So we decreased productivity and installation. Second, we saw in the May and June a little bit of increase in churn in [ WOM ] collections. So we believe that, that will be solved on the third quarter. Well, as Daniel said, we see a good trend of adding net adds of the next quarter. So -- because we already have -- the fiber already deployed, we believe that we have a very unique product in the market that has been well received. So we will catch up the productivity and installation on the next quarter.

[Daniel Hajj Aboumrad, executive]

And the way we see -- although the way I see things is we don't want to see quarter-by-quarter. I think maybe year. If you see year '23 against year '24, I think '24, all overall, the year is going to be much better than 2023. So maybe one quarter or the other one will be different. But all overall, the trend, the year is going to be good in Telmex.

[Operator]

The next question comes from Alejandro Lavin from Santander.

[Alejandro Lavin, analyst]

I have a couple of quick questions. First of all, on M&A, I mean, you mentioned that you're always in general open to opportunities. So I'm wondering what kind of geographies or assets would you be looking at? And number two, it's more of a longer-term question. I mean we hear a lot about artificial intelligence and all the possibilities that this might enable. So what are your thoughts on this megatrend and how do you think America Movil can position to benefit from this megatrend?

[Oscar Von Hauske Solís, executive]

Alejandro, I mean I think that what we have said is we don't expect any M&A to take place this year. That's what we said in our Investor Day. I think recent question on the new environment in Chile would call for that. We only know that there is this issue with Chapter 11, which WOM has been placed into. But it's not -- as Daniel said, I think we're always open to listening to things, but there is going to be expectation that we have had this year either we weren't going into an M&A so far.

[Daniel Hajj Aboumrad, executive]

And the second question is on the trends. Can you repeat the second question, the megatrends on...

[Alejandro Lavin, analyst]

Yes, sure. Yes. So thinking about artificial intelligence, I mean, how does the management think about positioning to take advantage of this megatrend? I guess this trend for the next 10 years or so, how can American Movil participate in this trend?

[Daniel Hajj Aboumrad, executive]

I think it's very important. I think artificial intelligence is something that we have already, but it's not -- it's going to take some time to implement in the company. We're working on that. The first thing that we do is we're digitalizing everything internally in the company. And we are working very hard on all the data, but there's going to be a lot of AI coming to be more efficient to know more the customer, to reduce cost, to save energy, to do a lot of things, and we're working on that to take all these megatrends that will be more efficient and productive to the company.

So there's a lot of things in AI that are coming to make us more efficient, more productive and to know more our customers and we're working on -- and saving also costs in call centers, data centers. There's a lot of things that AI is coming, and America Movil, of course, is working on that. And -- but that's not something that you're going to see for tomorrow, but we are working on all these trends to put the company in a very good opportunity on saving costs and all of what I'm saying.

[Operator]

The next question comes from Juan Cruz from Morgan Stanley.

[Juan Cruz, analyst]

And I apologize if this was already answered. I joined late, so my apologies. Going back to the Chilean JV, I just wanted to know now that America Movil is assuming ClaroVTR, if there's going to be disclosure on the operations, financials of the JV going forward, that's number one. And number two, given that VTR had bonds outstanding, what are the plans with those bonds? What is the company going to do with those, if anything as a result of the after JV being consolidated.

[Daniel Hajj Aboumrad, executive]

I think that when we consolidate the company, there is going to be the same information for Chile that we have for all the other countries. That's what we're going to do. And...

[Carlos Jose Garcia Moreno Elizondo, executive]

Yes -- but once we consolidate, the bonds will remain outstanding as they have been, and they will be serviced as any other -- that of America Movil.

[Juan Cruz, analyst]

Okay. Got you. But no -- there's no plan to either refinance those for the time being or do anything with them?

[Carlos Jose Garcia Moreno Elizondo, executive]

No plans.

[Operator]

We currently have no further questions, so I will hand back to Mr. Daniel Hajj for final remarks.

[Daniel Hajj Aboumrad, executive]

No, I just want to thank everyone for being in the call. And Carlos, Oscar and Daniela, thank you very much. Bye-bye.

[Carlos Jose Garcia Moreno Elizondo, executive]

Thank you all. Bye-bye.

[Operator]

This concludes today's conference call. You may now disconnect.