Fitch: America Movil Merger with Holding Company Neutral to Credit Quality

Business Wire, Nov 13, 2006

MONTERREY, Mexico -- Fitch Ratings views the announcement to merge America Movil S.A. de C.V.(AMX) with its holding company America Telecom S.A. de C.V.(AMTEL) as neutral to AMX's credit quality. Fitch incorporates into America Movil's ratings implicit support to AMTEL in the form of management fees and dividends to help AMTEL service its debt. The proposed merger will increase America Movil's net debt by approximately US$1.3 billion considering America Telecom's financial information as of Oct. 31, 2006. Pro forma total debt to last 12 months (LTM) EBITDA should remain strong in the category, increasing to 1.3 times (x) from 1.1x.

Fitch rates America Movil foreign currency and local currency Issuer Default Rating (IDR) at 'BBB ' with a Positive Rating Outlook, including approximately US$3.1 billion in debt. Fitch also rates a Chilean notes program of approximately US$1 billion 'AA (chl)', with a Stable Outlook.

The ratings of America Movil are supported by the company's strong market position in the Mexican wireless 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. 100% of Verizon Dominicana C. por A., 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 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 have resulted in strong cash flow generation. Telcel accounted for 47% of consolidated revenues and 66% of EBITDA for the first nine months of 2006. Telcel 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% to 40.7 million wireless lines over the LTM ended Sept. 30, 2006.

America Movil is the largest provider of wireless services in Mexico and Latin America with sales and EBITDA for year-end 2005 of approximately US$16.0 billion and US$4.9 billion, respectively. As of Sept. 30, 2006, America Movil is composed of subsidiaries in 13 countries in Latin America plus the United States 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, and the United States. During 2005 the company completed the acquisitions of operators in Paraguay, Chile and Peru, expanding its presence in Latin America.

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