Mexican telecommunications giant America Movil (AMX) paid a hefty price to increase its presence in the Caribbean market by 29 per cent last year, having decided to grab up, through acquisitions, a regional stake in a market that is well into the liberalisation process.

When AMX paid 25.3 billion pesos for MiPhone and a Puerto Rican mobile company, it meant that the firm paid nearly eight times what it cost its major regional competitor, Digicel, to bring on less than a million customers to its regional customer base.

In its financial statements for the quarter ending December 31, AMX noted that "the cash flow we generated throughout the year allowed us to finance our capital expenditures in the amount of 34.6 billion pesos (and) to pay the purchase price of our Puerto Rican and Jamaican operations, 25.3 billion pesos".

The two acquisitions by the Mexican firm brought on 786,000 subscribers to its client base, but the larger amount would have been attributed to the Spanish-speaking island as MiPhone had 222,000 clients by AMX's account.

The acquisitions did however translate into a 29 per cent jump in AMX's Caribbean operations pushing its total wireless subscriber base in the Caribbean to 3.5 million.

At approximately 11 Mexican pesos to one US dollar at the time, it would have meant AMX paid around US$2.3 billion (J$165 billion) for both the Puerto Rican firm and MiPhone.

After the buyouts, the amount of clients for the Latin American telecom paled in comparison to the six million subscriber base that its chief regional competitor, Digicel, boasts to have surpassed at the end of 2007.

But Digicel said that its total regional investment totalled US$1.9 billion. Which means it was nearly eight times as expensive to buy the regional stake in the mobile industry than it cost the Irish-owned telecom to grow its network.

AMX is currently undertaking a massive network expansion plan in Jamaica that will provide the platform for MiPhone to aggressively take on Digicel and Cable and Wireless this year.

Currently, Digicel has 1.8 million subscribers in Jamaica, while the number two in the mobile market, Cable and Wireless, has less than one million clients.

AMX has been grabbing up cell site towers from all over the world "once it meets their specifications", said one source, in an effort to rapidly expand its network.

Digicel, the Irish-owned company headed by Denis O'Brien that has enjoyed the lion's share of the local mobile market since it wrenched control from Cable & Wireless Jamaica (C&WJ) early in the decade when the telecommunications sector was liberalised, is said to be on high alert for fear of poaching from its technical staff.

The bigger picture still has AMX as the larger of the two, having surpassed 150 million subscribers in 2007 and achieved an asset base of 349 billion pesos (US$31.7 billion).

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