Obbligazione América Móvil 5.75% ( US02364WAH88 ) in USD

Emittente América Móvil
Prezzo di mercato 100 USD  ⇌ 
Paese  Messico
Codice isin  US02364WAH88 ( in USD )
Tasso d'interesse 5.75% per anno ( pagato 2 volte l'anno)
Scadenza 15/01/2015 - Obbligazione è scaduto



Prospetto opuscolo dell'obbligazione America Movil US02364WAH88 in USD 5.75%, scaduta


Importo minimo 100 000 USD
Importo totale 500 000 000 USD
Cusip 02364WAH8
Descrizione dettagliata América Móvil è una compagnia di telecomunicazioni multinazionale messicana che opera in Nord America, America Latina ed Europa, offrendo servizi di telefonia mobile, fissa, internet e televisione.

The Obbligazione issued by América Móvil ( Mexico ) , in USD, with the ISIN code US02364WAH88, pays a coupon of 5.75% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 15/01/2015







O F F E R I N G M E M O R A N D U M
U.S.$500,000,000
América Móvil, S.A. de C.V.
5.750% Senior Notes Due 2015
Unconditionally Guaranteed by
Radiomóvil Dipsa, S.A. de C.V.
We are offering U.S.$500,000,000 aggregate principal amount of our senior notes due 2015 bearing interest at 5.750%
per year. The notes will mature on January 15, 2015. Interest on the notes will accrue from November 3, 2004 and will be
payable on January 15 and July 15 of each year, beginning on July 15, 2005. Our wholly-owned subsidiary Radiomóvil
Dipsa, S.A. de C.V., also known as "Telcel," has irrevocably and unconditionally agreed to guarantee the payment of
principal, premium, if any, interest and all other amounts in respect of the notes.
The notes will rank equally in right of payment with all of our other unsecured and unsubordinated debt obligations. The
guarantees will rank equally in right of payment with all of Telcel's other unsecured and unsubordinated debt obligations.
In the event of certain changes in the applicable rate of Mexican withholding taxes on interest, we may redeem the
notes, in whole but not in part, at a price equal to 100% of their principal amount plus accrued interest to the redemption
date. We may redeem, in whole or in part, the notes at any time by paying the greater of the principal amount of the notes
and the applicable "make-whole" amount, plus, in each case, accrued interest. See "Description of Notes--Optional
Redemption" beginning on page 38.
We and Telcel have agreed to file an exchange offer registration statement pursuant to a registration rights agreement.
See "Registration Rights" beginning on page 49.
Investing in the notes involves risks. See "Risk Factors" beginning on page 18.
The notes have not been registered under the U.S. Securities Act of 1933, as amended, and are being offered only (1) to
qualified institutional buyers under Rule 144A and (2) outside the United States in compliance with Regulation S. For certain
restrictions on transfer of the notes, see "Transfer Restrictions" beginning on page 53.
THIS OFFERING MEMORANDUM IS SOLELY OUR RESPONSIBILITY AND HAS NOT BEEN
REVIEWED OR AUTHORIZED BY THE MEXICAN NATIONAL BANKING AND SECURITIES
COMMISSION (COMISIÓN NACIONAL BANCARIA Y DE VALORES DE MÉXICO, OR "CNBV").
REGISTRATION OF THE NOTES WITH THE SPECIAL SECTION (SECCIÓN ESPECIAL) OF THE
NATIONAL SECURITIES REGISTRY (REGISTRO NACIONAL DE VALORES) MAINTAINED BY
THE CNBV DOES NOT CONSTITUTE A CERTIFICATION AS TO THE INVESTMENT VALUE OF
THE NOTES OR OUR SOLVENCY. THE NOTES HAVE NOT BEEN REGISTERED WITH THE
SECURITIES SECTION OF THE NATIONAL SECURITIES REGISTRY, AND THEREFORE, THE
NOTES MAY NOT BE PUBLICLY OFFERED OR SOLD IN MEXICO. IN MAKING AN INVESTMENT
DECISION, ALL INVESTORS, INCLUDING ANY MEXICAN CITIZEN WHO MAY ACQUIRE NOTES
FROM TIME TO TIME, MUST RELY ON THEIR OWN EXAMINATION OF US AND TELCEL.
We have applied to list the notes on the Luxembourg Stock Exchange, but we are not required to maintain this listing.
Issue Price 99.346% plus accrued interest, if any, from November 3, 2004
The initial purchasers expect to deliver the notes to purchasers on or about November 3, 2004.
Sole Book-Runner
Citigroup
Credit Suisse First Boston
October 28, 2004


You should rely only on the information contained in this offering memorandum. We have not
authorized anyone to provide you with different information. We are not, and the initial purchasers are
not, making an offer to sell these notes in any jurisdiction where the offer is not permitted. You should not
assume that the information contained in this offering memorandum is accurate as of any date other than
the date on the front cover of this offering memorandum or such earlier date as may be indicated in this
offering memorandum.
TABLE OF CONTENTS
Page
Notice to New Hampshire Residents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Review by U.S. Securities and Exchange Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Enforceability of Civil Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Where You Can Find More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Presentation of Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
Ratios of Earnings to Fixed Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
Description of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
Form of Notes, Clearing and Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
Listing and General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
Unaudited Condensed Interim Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-1
Annex A--Report on Form 20-F for the Year Ended December 31, 2003, as Amended . . . . . . . . . . . . . . . .
A-1
We have included in this offering memorandum, as Annex A, a copy of our annual report to the SEC on
Form 20-F for the year ended December 31, 2003, as amended, which we refer to as our "2003 Form 20-F." Our
2003 Form 20-F includes risk factors, our audited financial statements and disclosures concerning our business
and financial condition and results of operations, as well as other matters. The 2003 Form 20-F constitutes part
of, and should be read in conjunction with the other parts of, this offering memorandum. You should carefully
review the entire offering memorandum, including our 2003 Form 20-F, before making an investment decision.
In connection with this offering, one of the initial purchasers acting as stabilizing manager, or any agent
acting on its behalf, may over-allot or effect transactions with a view to supporting the market price of the notes
at a level higher than that which might otherwise prevail for a limited period after the issue date. However, there
is no obligation on the stabilizing manager, or any agent acting on its behalf, to do this. Any stabilizing, if
commenced, may be discontinued at any time and must be brought to an end after a limited period. For a
description of these activities, see "Plan of Distribution."
This offering memorandum has been prepared by us solely for use in connection with the placement of the
notes. We and the initial purchasers reserve the right to reject any offer to purchase for any reason.
1


Neither the Securities and Exchange Commission, any state securities commission nor any other regulatory
authority, has approved or disapproved the securities nor have any of the foregoing authorities passed upon or
endorsed the merits of this offering or the accuracy or adequacy of this offering memorandum. Any
representation to the contrary is a criminal offense.
This document is only being distributed to and is only directed at (1) persons who are outside the United
Kingdom or (2) to investment professionals falling within Article 19(5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2001 (the "Order") or (3) high net worth entities, and other persons to
whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together
being referred to as "relevant persons"). The notes are only available to, and any invitation, offer or agreement to
subscribe, purchase or otherwise acquire such notes will be engaged in only with, relevant persons. Any person
who is not a relevant person should not act or rely on this document or any of its contents.
We are offering to sell, and are seeking offers to buy, the notes only in jurisdictions where offers and sales
are permitted. This offering memorandum does not constitute an offer to sell, or a solicitation of an offer to buy,
any notes by any person in any jurisdiction in which it is unlawful for such person to make such an offer or
solicitation. Neither the delivery of this offering memorandum nor any sale made under it implies that there has
been no change in our affairs or that the information in this offering memorandum is correct as of any date after
the date of this offering memorandum.
You must:
·
comply with all applicable laws and regulations in force in any jurisdiction in connection with the
possession or distribution of this offering memorandum and the purchase, offer or sale of the notes, and
·
obtain any consent, approval or permission required to be obtained by you for the purchase, offer or sale
by you of the notes under the laws and regulations applicable to you in force in any jurisdiction to which
you are subject or in which you make such purchases, offers or sales; and neither we, Telcel nor the
initial purchasers shall have any responsibility therefor.
See "Transfer Restrictions" for information transfer restrictions applicable to the notes.
You acknowledge that:
·
you have been afforded an opportunity to request from us, and to review, all additional information
considered by you to be necessary to verify the accuracy of, or to supplement, the information contained
in this offering memorandum;
·
you have not relied on the initial purchasers or any person affiliated with the initial purchasers in
connection with your investigation of the accuracy of such information or your investment decision; and
·
no person has been authorized to give any information or to make any representation concerning us,
Telcel or the notes, other than as contained in this offering memorandum and, if given or made, any
such other information or representation should not be relied upon as having been authorized by us,
Telcel or the initial purchasers.
In making an investment decision, you must rely on your own examination of us and Telcel and the terms of
this offering, including the merits and risks involved. The notes have not been recommended by any U.S. federal
or state securities commission or regulatory authority. Furthermore, these authorities have not confirmed the
accuracy or determined the adequacy of this document. Any representation to the contrary is a criminal offense.
The notes may not be transferred or resold, except as permitted under the indenture governing the notes, the
registration rights agreement entered into by us, Telcel and the initial purchasers, and the Securities Act and
applicable U.S. state securities laws. You may be required to bear the financial risks of this investment for an
indefinite period of time.
We have taken reasonable care to ensure that the information contained in this offering memorandum is true
and correct in all material respects and is not misleading in any material respect as of the date of this offering
2


memorandum, and that there has been no omission of information which, in the context of the issuance of the
notes, would make any statement of material fact herein misleading in any material respect, in light of the
circumstances existing as of the date of this offering memorandum. We accept responsibility accordingly.
The initial purchasers are not making any representation or warranty, express or implied, as to the accuracy
or completeness of the information contained in this offering memorandum. You should not rely upon the
information set forth in this offering memorandum, as a promise or representation, whether as to the past or the
future. The initial purchasers have not independently verified any of that information and assume no
responsibility for its accuracy or completeness.
None of us, Telcel and the initial purchasers, nor any of our and their respective representatives, is making
any representation to you regarding the legality of an investment in the notes. You should consult with your own
advisors as to legal, tax, business, financial and related aspects of an investment in the notes. You must comply
with all laws applicable in any place in which you buy, offer or sell the notes or possess or distribute this offering
memorandum, and you must obtain all applicable consents and approvals. None of us, Telcel and the initial
purchasers shall have any responsibility for any of the foregoing legal requirements.
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE UNIFORM
SECURITIES ACT ("RSA 421-B") WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT
A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF
NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY
DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER
ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR
A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN
ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN
APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR
CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY
REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
REVIEW BY U.S. SECURITIES AND EXCHANGE COMMISSION
We will agree to file a registration statement with the U.S. Securities and Exchange Commission, or SEC,
with respect to a registered exchange offer for the notes or a shelf registration statement with respect to resales of
the notes. See "Registration Rights." In the course of the review by the SEC of the registration statement, we may
be required to make changes to information contained in this offering memorandum. Accordingly, comments by
the SEC on the registration statement may require modification or reformulation of information we present in this
offering memorandum.
ENFORCEABILITY OF CIVIL LIABILITIES
We and Telcel are corporations organized under the laws of Mexico, with our principal places of business
(domicilio social) in Mexico City. In addition, most of our and Telcel's respective directors, officers and
controlling persons, as well as certain experts named in this offering memorandum, reside outside the United
States, and all or a substantial portion of their assets and our assets are located outside of the United States. As a
result, it may be difficult for investors to effect service of process within the United States upon these persons or
to enforce against them, either inside or outside the United States, judgments obtained against these persons in
U.S. courts, or to enforce in U.S. courts judgments obtained against these persons in courts in jurisdictions
outside the United States, in each case, in any action predicated upon civil liabilities under the U.S. federal
securities laws. Based on the opinion of Galicia y Robles, S.C., our Mexican counsel, there is doubt as to the
enforceability against these persons in Mexico, whether in original actions or in actions for enforcement of
judgments of U.S. courts, of liabilities predicated solely upon the U.S. federal securities laws.
3


WHERE YOU CAN FIND MORE INFORMATION
We file reports, including annual reports on Form 20-F, and other information with the SEC pursuant to the
rules and regulations of the SEC that apply to foreign private issuers. You may read and copy any materials filed
with the SEC at its Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20459. You may obtain
information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Any filings
we make electronically will be available to the public over the Internet at the SEC's web site at www.sec.gov and
at our web site at www.americamovil.com. We have included as Annex A a copy of our 2003 Form 20-F. We are
not, however, incorporating by reference in this offering memorandum any other reports, information or
materials filed with the SEC or any other material from our website or any other source. The reference above to
our website is an inactive textual reference to the uniform resource locator (URL) and is for your reference only.
We have agreed that, if we are not subject to the informational requirements of Sections 13 or 15(d) of the
U.S. Securities and Exchange Act of 1934 at any time while the notes constitute "restricted securities" within the
meaning of the Securities Act, we will furnish to holders and beneficial owners of the notes and to prospective
purchasers designated by such holders the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act to permit compliance with Rule 144A in connection with resales of the notes.
4


PRESENTATION OF FINANCIAL INFORMATION
Financial Statements
Our financial statements in this offering memorandum and our 2003 Form 20-F have been prepared in
accordance with Mexican GAAP and presented in Mexican pesos. Mexican GAAP differs in certain respects
from U.S. GAAP. Mexican GAAP requires restatement of all financial statements to constant Mexican pesos as
of the date of the most recent balance sheet presented. Our audited consolidated financial statements and the
other financial information appearing in our 2003 Form 20-F, and all annual financial information presented in
this offering memorandum, are accordingly stated in constant pesos with purchasing power as of December 31,
2003.
The unaudited condensed consolidated interim financial statements as of and for the six months ended
June 30, 2004 and June 30, 2003 and all interim financial information presented in this offering memorandum are
stated in constant pesos with purchasing power as of June 30, 2004. As a result of Mexican inflation during the
first six months of 2004, the purchasing power of one peso as of December 31, 2003 is equivalent to the
purchasing power of Ps. 1.0161 as of June 30, 2004. Accordingly, the audited financial statements and other
annual financial information are not directly comparable to the unaudited condensed consolidated interim
financial statements and information, because they are stated in constant pesos as of different dates.
Note 24 to our audited consolidated financial statements and Note 16 to the unaudited condensed
consolidated interim financial statements contain condensed consolidating financial information for Telcel.
References in this offering memorandum to "U.S. dollars" or "U.S.$" are to the lawful currency of the
United States. References herein to "pesos," "P." or "Ps." are to the lawful currency of Mexico.
This offering memorandum contains translations of various peso amounts into U.S. dollars at specified rates
solely for your convenience. You should not construe these translations as representations by us that the nominal
peso or constant peso amounts actually represent these U.S. dollar amounts or could be converted into U.S.
dollars at the rate indicated. Unless otherwise indicated, we have translated (i) U.S. dollar amounts from June 30,
2004 constant pesos at the exchange rate of Ps. 11.41 to U.S.$1.00, which was the rate reported by Banco de
México for June 30, 2004, and (ii) U.S. dollar amounts from December 31, 2003 constant pesos at the exchange
rate of Ps. 11.2360 to U.S.$1.00, which was the rate reported by Banco de México for December 31, 2003. The
exchange rate reported for October 26, 2004 by Banco de México for pesos was Ps. 11.4424 to U.S.$1.00.
5


FORWARD-LOOKING STATEMENTS
This offering memorandum, including our 2003 Form 20-F, contains forward-looking statements. Examples
of forward-looking statements include the following:
·
projections of operating revenues, net income (loss), net income (loss) per share, capital expenditures,
indebtedness levels, dividends, capital structure or other financial items or ratios;
·
statements of our plans, objectives or goals, including those relating to competition, regulation and
rates;
·
statements about our future economic performance or that of Mexico or other countries in which we
operate;
·
competitive developments in the telecommunications sector in each of the markets where we currently
operate;
·
other factors or trends affecting the telecommunications industry generally and our financial condition
in particular; and
·
statements of assumptions underlying the foregoing statements.
We use words such as "believe," "anticipate," "plan," "expect," "intend," "target," "estimate," "project,"
"predict," "forecast," "guideline," "should" and other similar expressions to identify forward-looking statements,
but they are not the only way we identify such statements.
Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of
important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates
and intentions expressed in such forward-looking statements. These factors, some of which are discussed under
"Risk Factors" beginning on page 18 of this offering memorandum and "Item 3--Key Information--Risk
Factors" in our 2003 Form 20-F, include economic and political conditions and government policies in Mexico,
Brazil or elsewhere, inflation rates, exchange rates, regulatory developments, new investment opportunities,
technological improvements, customer demand and competition. We caution you that the foregoing list of factors
is not exclusive and that other risks and uncertainties may cause actual results to differ materially from those in
forward-looking statements.
Forward-looking statements speak only as of the date they are made. We do not undertake any obligation to
update such statements in light of new information or future developments.
You should evaluate any statements made by us in light of these important factors.
6


SUMMARY
This summary highlights selected information from this offering memorandum and does not contain all of
the information that may be important to you. You should carefully read this entire offering memorandum,
including the risk factors and financial statements.
América Móvil
With 50.3 million wireless subscribers in ten countries at June 30, 2004 (compared to 43.7 million at
December 31, 2003 and 39.1 million at June 30, 2003), we are the largest provider of wireless communications
services in Latin America and one of the ten largest in the world. Because our focus is on Latin America, a
substantial majority of our wireless subscribers are prepaid customers. We also had approximately 1.7 million fixed
lines in Guatemala and El Salvador at June 30, 2004, making us the largest fixed-line operator in Central America.
We have recently deployed or upgraded GSM networks in Mexico, Brazil, Colombia, Ecuador, Guatemala, El
Salvador and Nicaragua and are in the process of deploying GSM networks in Argentina and Uruguay.
For the six-month period ended June 30, 2004, we had operating revenues of Ps. 58,489 million (U.S.$5,125
million) and net income of Ps. 7,270 million (U.S.$637 million), compared to operating revenues of Ps. 38,481
million (U.S.$3,672 million), and net income of Ps. 7,855 million (U.S.$749 million) for the corresponding
period of 2003, based on Mexican GAAP. For the year ended December 31, 2003, we had operating revenues of
Ps. 85,941 million (U.S.$7,649 million) and net income of Ps. 15,032 million (U.S.$1,338 million), as compared
to operating revenues of Ps. 59,743 million (U.S.$5,317 million) and net income of Ps. 4,784 million (U.S.$425.7
million) for the year ended December 31, 2002, based on Mexican GAAP. At June 30, 2004, we had total assets
of Ps. 164,941 million (U.S.$14,455 million) and total stockholders' equity of Ps. 73,772 million (U.S.$6,466
million), based on Mexican GAAP.
Our principal operations are:
·
Mexico.
Through Radiomóvil Dipsa, S.A. de C.V., which operates under the name "Telcel," we
provide cellular telecommunications service in all nine regions in Mexico, with a network covering
approximately 35% of the geographical area of Mexico, including all major cities, and approximately
81% of Mexico's population. At June 30, 2004, Telcel had 25.6 million subscribers, and Telcel is the
largest provider of wireless telecommunications services in Mexico. For the six-month period ended
June 30, 2004, Telcel had operating revenues of Ps. 32,334 million (U.S.$2,833 million). Our Mexican
operations represented approximately 55% of our consolidated revenues in the first six months of 2004.
For the year ended December 31, 2003, Telcel had operating revenues of Ps. 52,466 million (U.S.$4,669
million). Our Mexican operations represented approximately 61% of our consolidated operating
revenues in 2003.
·
Argentina.
In 2003, we acquired CTI, the fourth largest wireless operator in Argentina measured by
the number of subscribers. CTI provides nationwide wireless services in Argentina.
·
Brazil.
With approximately 11.1 million subscribers as of June 30, 2004, we are the second-largest
provider of wireless telecommunications services in Brazil based on the number of subscribers. We
operate in Brazil through our subsidiary, Telecom Americas, and a number of operating companies,
under a unified brand name, "Claro." During 2003, we significantly expanded our coverage in Brazil by
acquiring BCP S.A. and BSE S.A. BCP is the second largest wireless provider in the São Paulo
metropolitan area. Our network covers the principal cities in Brazil (including São Paulo and Rio de
Janeiro). For the six-month period ended June 30, 2004, Telecom Americas had operating revenues of
Ps. 8,742 million (U.S.$766 million), which represented approximately 15% of our consolidated
7


operating revenues in the first six months of 2004. For the year ended December 31, 2003, Telecom
Americas had operating revenues of Ps. 11,397 million (U.S.$1,014 million), which represented
approximately 13% of our consolidated operating revenues in 2003.
·
Central America.
We provide fixed-line and wireless services in Guatemala, El Salvador and
Nicaragua, through our subsidiaries Telgua, CTE and ENITEL. We also provide wireless services in
Nicaragua through our subsidiary Sercom Nicaragua and in Honduras through our subsidiary Megatel
de Honduras. We acquired a controlling interest in CTE in 2003. We acquired ENITEL in two
transactions that closed in January and August 2004 and Megatel de Honduras in a transaction that
closed in June 2004.
·
Colombia.
Our three operating subsidiaries in Colombia--Comcel, Occel and Celcaribe--operate
under the "Comcel" brand. We are the largest wireless operator in the country measured by the number
of subscribers.
·
Ecuador.
Conecel, our subsidiary in Ecuador, is the largest wireless operator in Ecuador measured by
the number of subscribers. Conecel operates under the "Porta" brand.
·
United States.
Our U.S. subsidiary, TracFone, is engaged in the sale and distribution of prepaid
wireless services and wireless phones throughout the United States, Puerto Rico and the U.S. Virgin
Islands.
Our Markets
We operate pursuant to concessions or licenses to provide wireless telecommunications services in each of
the countries in which we operate. We seek to provide a full range of wireless telecommunications services in
each of our markets. Our networks are consistently optimized to try to ensure maximum coverage and high
quality service. We have recently deployed or upgraded GSM networks in Mexico, Brazil, Colombia, Ecuador,
Guatemala, El Salvador and Nicaragua, and we are in the process of deploying GSM networks in Argentina and
Uruguay. In 2003, we invested Ps. 13.7 billion (U.S.$1.2 billion) in our networks in capital expenditures. We also
seek to expand market share by exploring strategic acquisition opportunities in Latin America.
Our principal markets of operations are Mexico and Brazil, the two largest economies in Latin America. We
are the largest provider of wireless communication services in Mexico and the second largest in Brazil, based on
the number of subscribers at June 30, 2004. Telcel and Telecom Americas combined represented 74.3% of our
operating revenues in 2003 and 70.2% of our operating revenues in the first six months of 2004. In 2003, the
Mexican Finance Ministry estimates that the Mexican economy grew at a rate of 1.5% per annum and has
projected economic growth of 3.5% for 2004. In Brazil, the economy contracted at a rate of 0.2% in 2003
according to the Brazilian Ministry of Economy, and economic growth in 2004 is projected at 3.5%. We believe
that economic growth in these two key countries will enhance our operating revenues.
We believe our countries of operation offer considerable growth potential. Mexico, Brazil, Argentina,
Colombia, Ecuador, El Salvador, Guatemala and Nicaragua represent a combined estimated population of
362 million, or 67% of the total estimated population of Latin America of 540 million in 2003. Our markets are
characterized by relatively low fixed line and wireless penetration rates compared to the United States and Europe.
In most of our markets, the regulatory environment has become increasingly more open and flexible over
the past decade. These changes have increased competition as markets have become more open to new entrants.
In Mexico, these changes have exposed us to competition from domestic competitors and from international
operators. In other markets, these changes have allowed us an opportunity to enter as a competitor and capture
market share from local providers.
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Our Strategy
We intend to capitalize on our position as the leader in wireless telecommunications in Latin America to
continue to expand our subscriber base, both by development of our existing businesses and selected strategic
acquisitions in the region. We seek to become a leader in each of our markets by providing better coverage and
services and benefiting from economies of scale. We closely monitor our costs and expenses, and we will
continue to explore alternatives to further improve our operating margins.
Recent Developments
On October 25, 2004, we reported on results of operations for the nine-month period ended September 30,
2004. For that period, we had operating revenues of Ps. 93,265 million (U.S.$8,174 million) and net income of
Ps. 14,613 million (U.S.$1,281 million) compared with operating revenues of Ps. 61,518 million (U.S.$5,630
million) and net income of Ps. 10,032 million (U.S.$918 million) for the nine-month period ended September 30,
2003, in each case based on Mexican GAAP. At September 30, 2004, we had total assets of Ps. 175,655 million
(U.S.$15,394 million) and total stockholders' equity of Ps. 79,470 million (U.S.$6,965 million), based on
Mexican GAAP. For additional information concerning our results of operations for the nine-month period ended
September 30, 2004, see "Recent Developments" in this offering memorandum.
Our principal executive offices are at Lago Alberto 366, Edificio Telcel I, Piso 2, Colonia Anáhuac, 11320,
México D.F., México. Our telephone number is (5255) 2581-4411.
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