Telmex (NYSE: TII) may be Mexico's dominant service provider, but a 21.5 percent year-on-year decline in net profit illustrates the larger competitive threat with cable operators and competitive wireless operators eating away at its once-sacred wireline voice base.
Net income fell from $387 million in Q3 09 million to $305 million in Q3 2010, while revenue declined 3.2 percent from $2.38 billion to $2.31 billion.
A big contributor to Telmex's Q3 2010 declines were, not surprisingly, declines in its traditional wireline voice business. Mirroring similar trends taking place in the U.S., Telmex lost about 1.7 million access lines since Q3 2009 and 122,000 since Q2 2010.
While voice lines continued to decline, Telmex's broadband access subscribers rose during the quarter. As of the end of September, Telmex had 7.17 million broadband subscribers, up from 6.3 million in Q3 2009. To keep its broadband offering competitive, Telmex launched a last mile fiber network upgrade initiative in September that it says will deliver 20 Mbps speeds to consumers.
- TeleGeography has this article
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