Fitch Rates America Movil's US$500MM Sr. Notes 'BBB+'; Outlook Positive

Business Wire, Dec 22, 2006

MONTERREY, Mexico -- Fitch Ratings has assigned a 'BBB ' with a Positive Rating Outlook to America Movil, S.A. de C.V.'s (America Movil) US$500 million floating rate senior notes due June 27, 2008. Proceeds from the debt issuance will be used for general corporate uses. Fitch maintains a local and foreign currency issuer default ratings at 'BBB ' with a Positive Rating Outlook, including approximately US$3.8 billion of outstanding indebtedness. Fitch also rates 'AA (chl)' with a Stable Rating Outlook a Chilean notes program of approximately US$1.0 billion.

The ratings of America Movil, S.A. de C.V. are supported by the company's strong market position in the Mexican mobile segment, its diverse and growing portfolio of wireless assets throughout Latin America, and its sound financial and liquidity position. The ratings incorporate the agreements to acquire from Verizon Communications Inc. a 100% of Verzion Dominicana C. por A. which was closed on December 1st., 2006, a 52% interest in Telecomunicaciones de Puerto Rico (TELPRI) and jointly with Telmex a 28.51% interest in Compania Anonima Nacional Telefonos de Venezuela (CANTV), the merger with holding company America Telecom S.A. de C.V., the expectation of additional share repurchases as well as increasing dividend payments.

America Movil's credit ratings are underpinned by Telcel, its Mexican wireless unit. Telcel business fundamentals are supported by strong demand growth and stable EBITDA margins, which result in strong cash flow generation. Telcel accounted for 47% of consolidated revenues and 64% of EBITDA for the first nine months of 2006 and is the largest wireless provider in Mexico, with an estimated market share of 77%. Demand for wireless services in Mexico is still growing at a fast pace; Telcel grew its subscriber base by 21.3% to 40.7 million wireless lines over the last twelve months ended September 30, 2006.

America Movil has an increasingly diverse revenue stream, generated by a growing wireless business outside Mexico that provides the company with important cash flow and currency diversification. Fitch expects that over the next few years, operations outside Mexico should contribute more to consolidated EBITDA, diversifying away the cash flow coming from Mexico. The company's non-Mexican subsidiaries accounted for 53% of consolidated revenues and 36% of EBITDA during the first nine months of 2006 and are expected to generate sufficient cash flow to meet America Movil's consolidated net interest expense by approximately 3.5x; a geographically diversified portfolio of assets lowers business risk and cash flow volatility. As of September 30, 2006, America Movil operates in 14 Latin American countries outside Mexico and is well-positioned to benefit from the wireless growth opportunities present in Latin America. The company's average subscriber growth rate outside Mexico continues to be strong at 46% over the last 12 months ended September 30, 2006. As a result of growth, EBITDA margins for these operations have been lower and more volatile due to higher subscriber acquisition costs over the past few years, but are expected to increase and be stable as mobile penetration matures and growth slows across the region.

The company's liquidity position is strong despite of paying approximately US$2.4 billion on December 1st., 2006 for Verizon Dominicana. With short-term maturities and proforma cash balances (including the payment to Verizon) of US$1.0 billion and US$1.6 billion, respectively, at September 30, 2006, and with ample access to financial markets and strong cash flow generation, the company is expected to maintain a strong financial profile, absent major acquisitions, underpinned by a healthy EBITDA generation, which should be approximately US$7.5 billion for yearend 2006. Credit protection measures are strong for the rating category and should improve if debt levels remain stable supported by the expectation that EBITDA should continue increasing driven by the gain of scale of its operations. For the last twelve months ended Sept. 30, 2006, total debt to EBITDA was 1.1 times(x) and EBITDA to gross interest expense remain at 12.7x. The ratings incorporate increasing dividend payments and additional share buybacks.

America Movil is the largest provider of wireless services in Mexico and Latin America. In total, the company is composed of subsidiaries in 14 countries in the Americas with 113.9 million wireless subscribers. The company's investments outside Mexico are located in Brazil, Colombia, Ecuador, Argentina, Guatemala, Nicaragua, Honduras, El Salvador, Uruguay, the United States, Paraguay, Chile and Peru.

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