América Móvil announces that it has successfully completed the sale of 100% of its stake in Tracfone Wireless Inc. To Verizon Communications Inc.
Tracfone is the largest virtual operator of prepaid mobile services in the United States.
América Móvil received $3625.7 million in cash, of which $500.7 million was for cash settlements and working capital in Tracfone in this type of operation, and 57 million 596 thousand 544 were from Verizon stock.
The company has determined that, subject to Tracfone continuing to achieve certain operating goals (gains), Verizon must pay up to an additional $650 million in cash within two years of the final sale date.
According to the financial report for the second quarter of 2020, Tracvon recorded 214 thousand new subscribers, compared to 164 thousand chapters in the previous year.
May was particularly strong as the stimulus from the US government and additional unemployment benefits reached a large proportion of that country’s population, prompting people to look for attractive communications solutions.
Tracfone’s total revenue in the second quarter increased 4.5% from a year earlier to $2.1 billion.
Equipment revenue increased 23.6% and services revenue grew 1.2% compared to 0.1% in the prior quarter.
Average Revenue Per User (ARPU) increased 4.8% annually to $27.8. EBITDA of $313 million was up 76.2% over the previous year, mainly due to a new agreement under which certain broadcast cost reductions were granted.
Such discounts, which reduce the cost of service, apply from January 1. EBITDA margin increased to 15% of revenue from 8.9% over the previous year.
Written by: José de Jesús Guadarrama.
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