Telmex, Mexico's leading fixed-line phone operator, posted a worse-than-expected 28 percent decline in third-quarter net profit on Tuesday as revenue slipped amid stiffer competition. Telmex controlled by billionaire Carlos Slim, said its July-September net profit was 5.43 billion pesos ($497 million).
A Reuters survey of analysts had predicted a net profit of 6.45 billion pesos. Telmex dominates the fixed-line and long-distance market in Mexico, but has come under pressure from an increase in competition from smaller fixed-line players as well as mobile telephone operators.
During the quarter, revenue for the former state monopoly slipped 5.7 percent to 31.09 billion pesos and core earnings before interest, taxes, depreciation and amortisation, known as EBITDA, fell 11.1 percent to 14.36 billion pesos. Telmex posted 2.26 billion pesos in financing and exchange rate costs in the quarter compared to 426.6 million pesos in the same quarter last year.
Both revenue and EBITDA were lower than expected by analysts in the Reuters survey. Telmex said 17.67 million lines were in use at the end September, down 2.7 percent from the year-ago period. "Growth in the number of users in the telecommunications market is mainly in cell phones," Telmex said in its report.
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