Telefonica throws weight behind ailing Latam
forbes.com
Reuters, 08.20.02, 10:38 AM ET
SANTANDER, Spain, Aug 20 (Reuters) - Telefonica <TEF.MC>, Spain and Latin America's biggest telecoms operator, said on Tuesday it would continue to invest in Latin America, despite the current financial crisis in Brazil and ailing Argentina.
"We have set ourselves an investment target of between 11 and 13 percent of revenues (in the region)," Chief Operating Officier Fernando Abril-Martorell told a conference on Latin America.
The region accounts for nearly half of the Spanish-based group's revenues and core earnings (EBITDA), and it has invested more than $30 billion in Latin America since 1990.
"To make these investments profitable....we have a long term vocation in Latin America," he said.
"With increasing convergence between different regions and with the right political support, we think that in the long term (Latin America) will continue to provide growth which is higher than developed countries," he added.
Telefonica shares have been hit hard by fears of what an economic crunch in Brazil will do to earnings at the parent, while Argentina's economic crisis continues to have an impact. However, Abril-Martorell said he believed that country was over the worst.
"I have the impression that (Argentina) has touched bottom. Unpaid bills have stabilised at around 10 percent," he said.
Unpaid bills in Argentina rose to 9.4 percent in March from 6.4 percent in December, Abril-Martorell said.
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