America Movil SAB de CV
BMV:AMXB
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Estee Lauder Companies Inc
NYSE:EL
|
Consumer products
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Church & Dwight Co Inc
NYSE:CHD
|
Consumer products
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
American Express Co
NYSE:AXP
|
Financial Services
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Target Corp
NYSE:TGT
|
Retail
|
| US |
|
Walt Disney Co
NYSE:DIS
|
Media
|
| US |
|
Mueller Industries Inc
NYSE:MLI
|
Machinery
|
| US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
14.1318
17.05
|
| Price Target |
|
We'll email you a reminder when the closing price reaches MXN.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Estee Lauder Companies Inc
NYSE:EL
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Church & Dwight Co Inc
NYSE:CHD
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
American Express Co
NYSE:AXP
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Target Corp
NYSE:TGT
|
US |
|
|
Walt Disney Co
NYSE:DIS
|
US |
|
|
Mueller Industries Inc
NYSE:MLI
|
US |
|
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
This alert will be permanently deleted.
America Movil SAB de CV
Earnings Call Analysis
Q3-2024 Analysis
America Movil SAB de CV
In the third quarter of 2024, América Móvil exhibited strong momentum by adding 1.8 million subscribers, with 1.4 million classified as postpaid. Key contributions came from Austria (430,000), Brazil (291,000), and Colombia (159,000). Although there were 343,000 disconnections in Brazil's prepaid segment, the overall numbers reflect a thriving service landscape. Revenue reached MXN 223 billion, marking an 11.3% increase in service revenue. The company also experienced an operational profit of MXN 47.4 billion, an increase of 14.2% compared to the previous year, highlighting effective cost management alongside growth.
The recent downward trend of central banks' discount rates in various Latin American countries indicates a potentially more favorable financial environment. Mexico and Peru lowered rates by 50 basis points, while Brazil faced a slight increase. América Móvil reported that its revenue growth in mobile services accelerated to 5.2%, with a promising postpaid segment driving that success. Despite ongoing challenges, including competitive dynamics in the fixed broadband market, the company maintains an optimistic outlook for growth in a region characterized by evolving consumption habits.
Adjusted for one-off factors, operating profit experienced a 12% increase at constant exchange rates, reinforced by a notable decline in comprehensive financing costs (down 4.8% to MXN 28 billion). Interestingly, while regional currencies depreciated, a significant portion of service revenue expansion derived from favorable exchange rate dynamics, with the Mexican peso’s depreciation translated into improved dollar-denominated performance. The focus on higher-value offerings is expected to drive revenue and margin growth as the balance shifts toward postpaid plans.
The company is on target with capital expenditures, forecasting approximately $7.2 billion for the year, aligning with guidance provided earlier. There is no current change anticipated in shareholder remuneration, with MXN 14 billion allocated for buybacks thus far in 2024. Strategic cash flow management resulted in net debt increasing by MXN 47.3 billion but remains comfortably within the leverage ratio commitments established during the Investor Day. The net debt to EBITDA ratio stands at 1.34x, indicating effective financial resilience.
As the largest 5G infrastructure holder in Latin America, América Móvil plans to further enhance customer experience through technological upgrades. With 85% of fixed broadband connections transitioned to fiber-optic networks, the company is well-positioned to deliver superior service quality. Innovative packages that combine broadband with additional services are being well-received in the market, showcasing the company’s capability to adapt to competitive pressures while expanding its service offerings.
You don't have any saved screeners yet
Good morning. My name is Nadia, and I will be the conference operator today. At this time, I would like to welcome everyone to América Móvil's Third Quarter 2024 Conference Call and Webcast. [Operator Instructions]
Now I will turn the call over to Ms. Daniela Lecuona, Head of Investor Relations to begin.
Thank you. Good morning, everyone. Thank you for joining us today to discuss our third quarter financial and operating results. We have on the line Mr. Daniel Hajj, CEO; Mr. Carlos Garcia Moreno, CFO; and Mr. Oscar Von Hauske, COO.
Hi. Good morning. Welcome to América Móvil third quarter financial and operating report. And Carlos is going to make a summary of the results.
Thank you, Daniel. Good morning, everyone. Well, interest rates in the U.S. and several other countries continued their downward trend in the third quarter, with 10-year U.S. Treasury yields falling 85 basis points from the beginning of the quarter through mid-September to a low 3.6%. The decline was driven by concern about the cooling U.S. economy and its corresponding impact on the labor market. It prompted the Fed to finally declare its first discount rate reduction in 2.5 years, a period in which it brought about a 5 percentage point increase in such rate.
Shortly after the end of the third quarter, 10-year yields had bounced back to more than 4% on the back of unexpectedly strong nonfarm payroll numbers for September, wiping out half of the reductions that had taken place through mid-September. Throughout the quarter, central bank discount rates fell by 50 basis points in Mexico and Peru, 1 percentage point in Colombia and 25 basis points in Chile, but we're going up once again in Brazil, by 25 basis points.
In the third quarter, we added 1.8 million subscribers, of which 1.4 million were postpaid. These include regular subscribers as well as M2M accesses, bundles and fixed mobile devices. Austria contributed. 430,000 of them. Brazil contributed 291,000, Colombia 159,000 and Mexico 108,000 postpaid subscribers. Our prepaid segment obtained 468,000 net additions led by Colombia with 251,000, Eastern Europe with 213,000 and Argentina with 200,000, but registered 343,000 disconnections in Brazil, and 136,000 in Mexico.
In the fixed-line segment, we connected 327,000 broadband accesses, 116,000 Mexico, 59,000 in Brazil and approximately 43,000 in Argentina and Central America. We disconnected 83,000 land lines and 30,000 PayTV units in the quarter. Mobile postpaid and fixed broadband continued to be the main drivers of access growth with 5.9% and 5.2%, respectively, year-on-year.
Third quarter revenue totaled MXN 223 billion, with service revenue expanding 11.3% in Mexican peso terms and EBITDA 11.9%, partly reflecting the depreciation of the Mexican peso versus most of the challenges in our region of operations with the notable exception of the Brazilian real. Approximately 10% depreciation versus both in dollar and the euro, 8% versus Columbian peso and 12% versus the Peruvian sol.
At constant exchange rates, service revenue was up 5.5% year-on-year, an improvement on the 4.7% rate observed the prior quarter, while adjusted EBITDA increased 7.2%.
Mobile service revenue growth accelerated from the prior quarter to 5.2%, posting its best performance in over a year on the back of postpaid revenue growth. On the fixed-line space, service revenue rose 5.9%. Broadband revenue decelerated slightly from the prior quarter to 7.4% where as corporate networks revenue expanded 10.1% faster than the same quarter.
The decline in PayTV revenue continues but have become less and less significant. Brazil and Colombia continued their trend over the last year of posting improved service revenue growth every quarter, while Central America presents a very growth rate than the preceding 2 quarters. Mexico and Peru maintained the pace from prior quarters.
Our operating profit reached MXN 47.4 billion, it was up 14.2% in Mexican peso terms and 10% at constant exchange rates. Adjusted for one-offs, I mentioned above, our operating profit increased 12% at constant exchange rates.
We posted a net profit of MXN 6.4 billion in the quarter, nearly trebling the one obtained a year before. It was equivalent to MXN 0.10 per share or $0.11 per ADR and came about on the back of higher operating profit as mentioned before, but also as comprehensive financing costs came down 4.8% relative to the same period of 2023 to MXN 28 billion.
Our net debt ended September at MXN 433 billion having increased by MXN 47.3 billion relative december 2023, partly reflecting the impact of the depreciation of the Mexican peso on our non-peso financial obligations. In cash flow terms, our net debt increased by MXN 19.7 billion.
In the 9 months to September, our capital expected to total MXN 86.7 billion, shareholder distribution 32.9, split evenly almost differently between share buybacks and dividend payments. And we reduced our labor obligations in the amount of MXN 23.7 billion particularly all of this at Telmex.
Our net debt excluded leases to EBITDA after lease ratio ended September at 1.34x last 12 months EBITDA practically at the lower leverage limits that we committed to maintain in our Investor Day.
And finally, I'd just like to highlight that we received our third year rating upgrade by MSCI in our many years, reflecting improvements on corporate governance, security and data privacy.
With that, I would like to pass this back - the floor back to Daniel. Thank you.
Thank you, Carlos, and we can start with the Q&A.
Thank you. [Operator Instructions]
Our first question goes from Milenna Okamura of Goldman Sachs.
The first one is if you have any updated views on the competitive dynamics of the fixed broadband market in Mexico?
And my second question would be on your CapEx guidance. Is your target for the year still at about $7.4 million?
The second question, can you repeat the second question? We don't hear you.
I'm sorry, on the CapEx guidance for 2024.
Well, on the CapEx, I think we are on target for this year. We said that we're going to do around $7.2 billion, and that's our target, and we are more or less on that range. So no big difference on that.
On the dynamics on the fixed broadband in Mexico, Oscar can talk a little bit about that.
Well, the dynamics, as you've seen through the years, the competition has been increasingly very hard in Mexico, [ Telus ] has been reactive with the investments on upgrading the network, and now 83.7% of the fixed broadband are already connected to fiber. And not only that has been working to bundle different streaming video in order to do packages that are really, really well accepted in the market. Even last week, we launched a new package but we increased the speed, the entry-level of speeds from 60 to 80 with the same tariff. We include net lease 6 months free. We include Clarovideo and ClaroDrive bundled in the package. So we believe that -- I mean, we have 1 week of this product and the reception. We see that is very good in the market. So the competition is still -- but I think we're already operating a network in a good level to be really competitive in the market.
Another segment that is working pretty nice in Mexico is the B2B market. On the B2B market, all related to cloud computing, cybersecurity, horizontal solution has been received very well in the market as well. So that lever us to improve revenues in Telmex.
Only to add something that Oscar is saying, just to be clear, I think we have been putting a lot of fiber in the last years, but not only putting fiber, we have been upgrading our customers to fiber. And as Oscar is saying, maybe 85%.
84%.
84% of our customers are with fiber, good speeds, good quality, IT has been improving a lot in Mexico. It's one of the things that we have been doing, improving IT, so we can give better customer service install faster time to repair also faster. So we have been improving also on the quality of service.
So Mexico in fixed and in mobile is being very competitive. We haven't increased any price for a long time. We have been giving more for that. And it's -- but we feel that we have right now a very good advantage on the quality, capacity on the networks, on the -- in the mobile, on the coverage, on the quality, and the centers -- customer care centers. So all overall, we think we're doing good in Mexico.
The next question goes to Walter Piecyk from LightShed Partners.
I think just first, if I can start with the macro question. Obviously, there's some questions kind of what's going to happen going forward and into 2025? You have many data points in terms of what you're seeing with your customers, forget about Europe just throughout Latin America, in terms of recharges and subscriber activity and upgrades of phones.
Can you just give us a general sense of kind of -- what you've seen most recently and what you think or what your outlook is for the coming quarter in 2025?
Well, it's a very interesting question. I think I can divide into prepaid is very different than postpaid. I think prepaid depends a lot on how the economists are doing in Latin America. So people once recharge depending on the money that they have, the purchase power that they have. So that's one thing they need. There's a lot of prepaid that are moving to 5G in Mexico in Latin America. So we have been putting 5G all overall. But depending a lot on the economy and the way the economy in each country is doing.
And on postpaid, I think we have been doing very good. We have been upgrading our customers, giving them better handsets, more data and they are paying more. So that's the trend that we have been doing for the last 2 years since we have been putting 5G. And I hope that this trend will continue the same way for 2025.
So I think in the first part of your question, Daniel, you were saying that it does depend on the economy. So from what you're seeing currently, the economy is still instigating very good recharge rates on the prepaid side that has not started to cool at all?
If you look at the rate of growth of our prepaid revenues in Mexico, they were 4.1% in the quarter, last quarter, that was 4.3% [indiscernible] identical, a year ago, they were at 4.1%. So we haven't really seen as much a slowdown as some people had expected to see it on account of slowing down of the economy.
And as Daniel said, I think postpaid revenues are also holding up. So I think that generally, we have seen more sensitivity, I think, probably in Brazil because as you know, Brazil's economy has been accelerating sharply of late, and that has had an impact in the sector definitely. But for the most part, I think we are not seeing very major changes. This is a very defensive industry, as you know, and revenue tend to call a [ pretty good ] in all GDP scenarios.
And a lot of things that you do, I think people needs to use more the phone, and they are going to use more and more phones, if they can have a better phone, they can have 5G, faster networks, more data. That's what you are going to see in the next years, not only next year. So in the next years, everything is going to go through the phone.
And then just one quick technology question follow-up, I guess. Could you just refresh us on who you expect to be your partners in terms of connecting your customers' phones to satellite constellations. I think you might have had -- maybe I'm wrong, but I thought you had an agreement with AST at one point.
I'm just curious kind of how you see your market partnership there in terms of satellite direct connectivity to the phones of your customers throughout Latin America?
Well, I think what -- there's 2 partners. So what we're using right now, we're using some partners, not only one. I think we have 2 or 3 partners. But things -- we are always reviewing which partner is giving us the best services to connect in some rural areas, the sell side. So for the mobile backhaul, we use satellite.
And then there's the other part that is when we don't have any coverage there that the phone will connect there and that. So these 2 different services we are reviewing right now. We're already having the first one connecting the cell sites 2 or 3 different vendors.
And but there is always -- we're always looking to have better quality and reduce costs. So that's moving every day. So I don't know exactly what we have, which ones we have, on stars right now.
Well, we have Starlink, we have SpaceX, we have a have AST, [indiscernible] doing AST as well.
In SpaceX, do you have an agreement or you're exploring a possible agreement with Starlink?
We already have a n agreement on resell.
Their service and we are exploring an agreement so they can connect the backhaul.
We are already using Chile for mobile backhaul.
The next question go to Marcelo Santos of JPMorgan.
I wanted to double-click a bit on broadband dynamics. The first question would be in Mexico. You had good net adds, but it was a bit less than in the second quarter. Is this because you had lower gross adds or because there was a bit of higher churn in the market? Just wanted to understand if the market is getting more competitive.
And the second question is if you could comment on the competitive dynamics of Brazilian broadband? Is a more general question.
Yes, we experienced on the second and third quarter, a little bit more churn. In Mexico, we attribute you to the economics. So yes, within both. We've been seeing this fourth quarter in the same part that we had the last 2 quarters.
And in Brazil, in broadband. We are the leaders in high-speed Internet in broadband, even we were awarded the best WiFi in Latin America, in Brazil, delivering our services. So we are the leaders in market share as well in Brazil. And as you know, there is a lot of competition from the ISPs, but we keep growing the base. We already upgraded all the data, all the network to deliver 1 gigabit speed to DOCSIS3.1 and we have almost 11 million compasses with fiber to come. So I think we are very well positioned.
And another thing in Brazil is that we've been working on [ Convergys ] that has been working pretty nice adding fixed and mobile and PayTV. We've recently launched a new way to PayTV and its combined with broadband. It's a new package of -- I won't call PayTV, I think it's a different product. It's like more entertainment hub. What we did is to really put the channels that have more audience plus net lease readvertising, plus Google play, plus Apple plus with a very good, good conditions to the market. So we believe that we tied the broadband, and we will keep going growing in broadband.
And just to give you like a sense in Mexico, third quarter of '23, we do 20,000 net adds in broadband. Fourth quarter of '23, 165,000. First quarter of '24 this year, 325,000. Then second quarter this year, 148,000 and third quarter 116,000. So we hope we can maintain this 120,000 or 150,000 or 100,000 for the next quarter.
So I think we're prepared as we said, and it's a very competitive market. That's why we have also some churn because it's a very competitive market. But I think we were prepared to try to recuperate a little bit of the market share that we do. We already did last years.
Thank you. The next question goes to Gustavo Farias of UBS.
Hi, everyone. Two from my end. First one, we've seen some negative net adds in mobile in Brazil, of course, driven by prepaid. I just want to check what you guys expect in terms of trends going forward. And of course, in terms of competition in the region as well in mobile specifically?
My second one is regarding, we've seen some increase in the net debt this quarter. And if you could share some color on your debt strategy and how you are looking at FX impacts going forward as well?
Well, let's start with Brazil. I think in Brazil, we are doing very good. We are moving a lot of prepaid subscribers to postpaid subscribers, and that's the reason why we have negative, as you said, but we have a very good and very positive trend in postpaid. Other thing is that we are trying to have our prepaid base very clean. So we want to have that. So we have been very aggressive if a customer is not consuming not to count as a customer. So that's what we are doing, and there's a rule, but we have been very strict on that and moving a lot of these prepaid to postpaid subscribers have been very successful.
And the second question, which one is?
Regarding how do you see your debt strategy and FX impact going forward.
Regarding what?
You have a bad connection, Marcelo (sic) [ Gustavo ] , can you please repeat the question or send it via chat or email to me?
Yes, of course, I can repeat the question. I'm just wondering what you guys -- how you see your debt strategy regarding [indiscernible] going forward.
Marcelo (sic) [ Gustavo ], I think we are not really looking at taking on additional debt. As you can see, we have reduced our leverage. We have very limited refinancings to do next year. It's probably the year with the least amount of maturity that we have, it's probably less than 1 billion. I think that we have been doing very successful at trying to drive the growth of our Mexican global peso bonds, and we've already issued in a bit more than a year, MXN 55 billion, which was for the time to USD 3 billion. And we expect that we can continue to consolidate this program. And we will also be looking at raising a bit more financing in some of our local markets.
In fact, we've been doing a little bit of this in Peru, Colombia and Brazil. So I think that's going to be more the strategy to focus a bit more on local currency generally. But again, it's basically in the context of refinancing existing debt which we expect to maintain that level. We do have a short-term debt, and I think that's a variable that we can play with. We will be adjusting downwards very likely in the next few months.
The next question goes to Ernesto Gonzalez of Morgan Stanley.
It's just one, can you please provide any color on your CapEx plans for Chile?
We -- it's too early to see. As we said in our results. We're going to start to consolidate Chile 1st of November. We're going to have [ 92 ], so we're going to consolidate also the CapEx, we still haven't finished the CapEx for next year. So we don't know what -- it's not going to be a big difference on what we have. So we consolidate the revenues. We're going to consolidate the CapEx, but it's not going to change too much the idea that we have. So I don't have the final number, but it's not going to change significantly the CapEx that we have budget for next year.
The next question goes to Phani Kanumuri of HSBC.
So the first one is that LatAm currencies have depreciated significantly in the last 6 months. So do you see any change in your shareholder remuneration or CapEx direction than what you did in your Analyst Day in May?
The second question is actually on the constant currency growth rate for the fixed broadband. You had given a number of 5.9%, wanted to check which countries have registered a better-than-average growth rate among your major countries?
We don't understand very good your question. But the second, when you said the average growth on broadband, I think the average growth -- the growth in broadband has been better every quarter. I think it's doing good. In each countries, we have been doing good. I see -- I think all overall, we are seeing a little bit less competition on this fiber companies that the wholesale networks that they do all around Latin America, and that help us to be more aggressive and to increase our sales. And so on broadband, I think it's still low penetration in broadband in Latin America, and we're going to see good growth in the next years, okay, in broadband.
And the first one, we don't understand what was your question?
So I think for the second question, like -- so you had a 5.9% fixed service revenue growth but all the major markets that you had, including Mexico, Colombia, Brazil all have registered revenue growth that is lower than 5.9%. So I was just trying to understand which geographies have grown above the 5.9% fixed service revenue growth. That's the first...
We don't have it here, but you can discuss with Daniela and she can give you exactly where we are higher than 5.9% and where we're a little bit lower. But I think Brazil, I don't know what's the growth in Brazil?
Brazil 8.8%, Columbia 7.2%.
Remember that broadband also includes corporate -- the corporate segment there. So but you can talk to Daniela and disclose that.
It's 8.8% for Brazil, 7.2% for Colombia, 15.7% in Eastern Europe.
8.6% Central America.
8.6% Central America. Yes.
And 10.9% in [indiscernible].
So that's fixed growth of 7.4% for América Móvil. On the corporate network side, we have 10% to América Móvil, including 12.8% in Mexico, 7.9% in Brazil, 14.1% in Colombia, and 7.5% in Central America.
I'll connect with them on this. So the first question was that because you have seen depreciation of currencies in across LatAm in the last 6 months, is there any change in the view of shareholder remuneration or CapEx that I guess that you had in -- during your Analyst Day in May?
No. We don't have any change on CapEx. We've finished this year. So the CapEx for this year is done and we're reviewing the CapEx of next year, but we don't see any change on that.
And also on the shareholder remuneration, we haven't had any difference also. So we're in the target that we have. What was the buyback that we have for all this year, Carlos?
No. From January to today of the third quarter...
We have about MXN 14 billion.
MXN 14 billion.
The next question goes to Alejandro Lavin of Santander.
Good morning, everyone. So first of all, congrats on the results. I mean you're in solid top line result. I mean the currency what was a headwind, now it's a tailwind, you've been rising profitability, stable CapEx, low leverage. So it sounds like that the stars are sort of timing for a very positive out for end of next year, especially all of next year, right? So congrats on that.
And second, well, it seems that you have a very portable position in terms of competition in the LatAm region and maybe in other markets. So my question is regarding M&A abilities, right? I mean there are some opportunities in the very near term in LatAm. But in general, like strategically, what kind of assets or regions would you...
Well, I think on M&A, we are not seeing anything. And we don't think we have any opportunities in Latin America in M&A. It's very difficult, so we are over there. So in Latin America, we want to grow and put our CapEx and penetrate more and have the best technology. And that's what we have been doing for the last 3 or 4 years. So what we have been seeing today is everything that we do the last year we have been digitalizing more the company. We have been taking care of our customer care. We have been very careful on cost and expenses, we have been upgrading all our platforms. We have the biggest 5G network in Latin America is America mobile 5G network.
So all overall, we have the latest technology, and that gives us better quality, more speed and better cost than our competitors. So that's more or less what we are focusing, and that's what we are going to do for next year. So that's what we have been saying over the last years.
But no I mean -- no M&A planning right now. We are open to other opportunities but we don't have anything right now. The only thing is consolidate Chile -- that we're going to consolidate Chile, and we have to work a lot there. There's a very, very competitive market there.
So as we said, we have been upgrading all our mobile network. We have been making an agreement with the wholesale [ Onet ], the wholesale company. We also have fiber there. So we are finalizing all the merger that we have with the liberty and get all the synergies that we have there. So we are in a big process in Chile that we have for the next year.
The next question goes to Lucca Brendim of Bank of America.
I have two here. The first one on Colombia results accelerated this quarter, reached the 3-year high in terms of service revenue growth. Is this already reflecting somewhat a more rational market after the recent changes you saw in this region?
And then the second one for Brazil. How are you seeing pricing dynamics in mobile going forward? Is there still potential for further price hikes? And when we're thinking about ARPU expansion for next year, will be -- should you be focusing more on the upselling or indirect price hikes?
We're always focused more on upselling our customers because if you upsell your customer, you give more to your customer and they pay you more. So I think it's much better upsell your customers than increase price, okay?
I don't know what we're going to do in Brazil right now. But I think we are focusing more on upsell and giving more data to all our customers, moving prepaid to postpaid and that, I think, that's the trend in Brazil.
In Colombia, just on the service revenue growth, I think it's important to highlight how it's improved. But it's not only mobile. It's been mobile and fixed, so just to give you an idea, first quarter this year, we were growing 0.4% in mobile, now we're growing at 4.0%. In fixed line, we were growing at 2%. In service revenues today, we're growing at 5.2%. So I think it's important to see that this recovery is taking place all throughout the country, not only mobile, but it's been very meaningful.
And only to add to something that Carlos said on Colombia is that we are the biggest network -- 5G network in Colombia. We take advantage of the frequencies, the option and we have been putting that for maybe 8 months before the auction. And it's been very -- we have maybe 20% of our traffic right now in 5G in Colombia. So that gives a very good quality and very good service to our customers, and they spend more because they use more data.
Thank you. The next question goes to Carlos Sequeira of BTG Pactual.
Today, we -- it's a quick one. We model for AMX to generate a little more than $5 billion in free cash flow next year. And I was wondering with leverage close to the bottom of the range, is there any reason why you wouldn't return this free cash flow to investors in 2025, all of it or a good part of it, at least?
Carlos, as you recall, we've met you guys for the Investor Day in May, and we established some a band for our leverage ratio. And we said the band is going to be 1.35 to 1.5. And we are exactly at the lower end of the band. So I think that as I have mentioned before, we don't really have any continuing to reduce leverage much further from where we are. Maybe a little bit on the short-term debt.
Thank you. The next question goes to the Carlos Legarreta of Itaú.
My question in this case will be for Argentina, please. I would like to remind us what are your plans there in fixed revenue, obviously, that's growing very nicely because I know that footprint is growing. And I know you're doing mostly fiber. So if you can talk a little bit about that and also how is the wireless business in evolving? obviously, it was very positive to quarter, but some color on the market trends would be helpful.
Very good that you talk a little bit -- you ask a question on Argentina. I think Argentina is doing okay. We have been still investing. We don't stop anything the last years on Argentina. So we put fiber when things are doesn't look so good. And we're growing how many customers on broadband we have right now?
No, more than 1 million, and we have been growing and having 1.4 million subscribers on broadband, we have in Argentina [indiscernible] 1.6 million we have in Argentina. So we have been growing, it's still growing very good, and we are upgrading our network, mobile network, and I hope Argentina will reduce more the inflation and do better on the economics. And then we're going to have a very good company there.
Thank you and maybe...
Sorry, we have been growing from being the third one in mobile. In customers, I think we are the first one right now. So I'm not so sure but doing customers. We are the first one almost the first one in mobile right now and growing in the fixed-line.
Okay. And how about your 5G plan do we have the necessary spectrum? Are you still waiting for an auction to happen?
Yes. Yes, we are putting 5G and we're putting more cell sites in 5G, and that's the way we're going to grow there. So we are investing. We have a CapEx that is the focus on assigned to Argentina, and we're doing all the things with the CapEx that we have there.
Thank you for the update.
[Operator Instructions] And the next question goes to Camila Koga of BBI.
My connection is not good, so I apologize if you have already answered this. I have a quick one on the [indiscernible] Nubank. If you could give us more details about it. I want to have an idea of progressive if Nubank can be if the agreement of the banks offer prices lower than client prices. Thank you.
Look, we don't hear you very well, but I'm going to add a little bit on the other question. The last question that they asked me talking about Argentina because we always talk a lot on Mexico, Brazil and Colombia. But I think all around América Móvil, we have been doing very good. We talk about Peru, in Peru, we have been growing, growing EBITDA, growing with fiber, upgrading our networks, giving more plans and all of that then we go to Central America. Central America has been having.
Sorry, no. Sorry, my question is on the -- sorry...
On Central America, we have been also doing very good excellent gaining share, putting fiber putting more coverage and growth has been very good. The growth on mobile and the growth on peaks. Then if we go to Dominican Republic, also, América Móvil has been exceptional in Dominican Republic. Then we go to Eastern Europe. Eastern Europe has been with a very good growth expanding. We used to have only mobile, we have fixed all around with broadband.
So in all the different countries we have been doing very good and gaining market share. So just when they talk about Argentina, it's not only Argentina, I think all the other countries has been having an exceptional developed for the last year.
So sorry to not to answer your question, but I want to give these comments because we focus in 2 or 3 countries, very important country, but all the other ones are also important and doing very, very good also. Sorry, your question again?
My question was on the [indiscernible] Nubank. If you could give us more details about it. I want to have ideas of how aggressive Nubank could be and just maybe the...
We cannot really understand anything that you're saying. Do you want to email me your question?
Okay. So we can talk later.
Okay. Thank you.
Thank you. That's all the questions that we have time for today. I will now turn the call back over to Daniel Hajj for any final remarks.
Thanks to everyone for the call and see you next quarter. Bye-bye.
Thank you. This now concludes today's call. Thank you for joining. You may now disconnect your lines.