| | |  Technology News | July 2008 
Telmex Shifts Service Focus
 Mark Stevenson - Associated Press
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| | As more customers chose e-mails and text messages over phone calls, Telmex saw second-quarter income fall. The company said it would shift emphasis to broadband services. | | |
Mexico City - Mexico's once-monolithic phone company, Telefonos de Mexico, said on Wednesday that it is focusing on broadband, service packages and computers sales to offset declining revenues from traditional voice and dial-up calls.
Telmex saw second-quarter net income fall 13 percent to 6.2 billion pesos ($612 million) from 7.1 billion pesos ($701 million) in the same period last year, as it faced stronger competition and more customers opted for e-mail and text messaging over phone calls.
Local calls decreased 10.3 percent in the quarter, and the number of lines in service fell 3 percent since last year, to 17.7 million lines in service as of the end of June, Telmex said.
The company controls more than 90 percent of Mexico's land lines.
"The statistics related to voice services continued to slow down, in part because we are actively encouraging customers to migrate from dial-up to broadband," said Telmex Chief Financial Officer Adolfo Cerezo. "Customers increasingly choose e-mails and text messages over voice for many conversations. . . . The traffic figures reflect those trends."
Increased competition from rival mobile and fixed-line carriers also played a role in declining revenue, as the company continued to cut prices.
Convergence - the offering of television, voice and data packages together - has been stymied by the Mexican government's slowness in establishing a regulatory framework, company officials said on a conference call with investors.
"Telmex continues to believe that convergence represents the evolution of telecommunications," said CEO Hector Slim, the nephew of the company's top stakeholder, Carlos Slim. The billionaire is one of the richest men in the world.
"As has been the case for some time, Telmex is ready to offer triple play," Hector Slim said.
But he noted that the company is also "focusing on opportunities in broadband and packages" of bundled Internet, long-distance and other services.
Telmex added 879,000 DSL Internet accounts in the first half of 2008, for a total of 3.8 million of as June 30, up 60 percent compared to June 2007, CFO Cerezo said.
It also sees high growth potential in sales of computers through its customer-office network.
Overall second-quarter sales fell 6.3 to 30.9 billion pesos ($3 billion) from 33 billion pesos in the year-ago quarter. Earnings before interest, taxes, depreciation and amortization, or EBITDA, fell 7.5 percent to 14.4 billion pesos ($1.4 billion).
Telmex's U.S.-traded shares fell 2.3 percent to $24.20 Wednesday on the New York Stock Exchange. |
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