Mexico's Iusacell CEO pledges growth this year
biz.yahoo.com
By Fiona Ortiz
MEXICO CITY, Feb 21 (Reuters) - The chief executive of Mexican wireless telephone firm Iusacell
(NYSE:CEL - news) on Thursday -- the day after it reported disappointing fourth-quarter results and
weak subscriber growth for 2001 -- pledged to resuscitate growth this year.
Iusacell shares closed down 4.26 percent in heavy trade Thursday on the Mexico
City bolsa to 2.95 pesos per share, as the market reacted to the company's poor
performance. The stock is down 17 percent so far this year.
The company reported on Wednesday that it ended 2001 with nearly 1.9 million
customers, up only 4 percent in the year compared with booming 62 percent
full-year subscriber growth at its main competitor Telcel.
``Our growth in the second half (of 2001) was very bad, very poor, very sad. I'm
sure, I promise, that you will be seeing growth as of January 1,'' Iusacell Chief
Executive Officer Peter Burrowes told reporters at a news conference.
Burrowes, who has headed the company since last May, said January and
first-half February growth have been strong and that the company would surpass
its estimates for first-quarter growth. He did not say what those earlier estimates
had been.
When Burrowes took the helm, he pledged to change the company's strategy to focus more on Mexico's booming prepaid cellular telephone market, which has been such a success story for market leader Telcel, a subsidiary of America Movil (NYSE:AMX - news) , which is part of the business empire of Mexican telecommunications billionaire Carlos Slim.
Prepaid mobile phone customers can buy the phone and then use it just to receive calls, or buy cards representing minutes of air time for outgoing calls.
Burrowes said he dedicated himself to reorganizing Iusacell in the second half of last year, replacing seven of nine vice presidents, in every area from systems to finance, and that growth had slowed while he concentrated on housecleaning.
Burrowes said the company added 300,000 users last year, but lost 200,000. The post-paid segment of the company saw a decline in users, which he blamed on the economic slowdown in Mexico. Post-paid phone customers make unlimited calls and then pay a monthly bill.
The chief executive said that on March 15 he will be announcing a forecast for the year's growth and finances.
He said Iusacell's capital expenditures in 2001 were lower than planned because the low subscriber growth meant the company did not need to expand to provide quality service.
But said his forecast for higher growth this year means the company will have to invest. He projected Iusacell would invest $250 million this year in its central service areas, plus $75 million in two areas in the north of the country where it recently launched service, and $35 million in the south, where Iusacell bought out another operator last year.
As part of the company's growth strategy, Iusacell launched three new products on Thursday and said the company will launch more this year.
One product announced on Thursday is a new phone service that is a prepaid, post-paid hybrid. For a fixed monthly fee of 165 pesos the user will have 30 minutes of outgoing calls (incoming calls are free). Then the customer can buy cards for more calls at a discount rate, and can also contract a long-distance option.
The other two products were a new long-distance and cellular prepaid card that doubles as a greeting card, and roaming capabilities in Europe. |
