[AMX] América Móvil: Q3 2026 Earnings Preview on Mexico Line Suspensions and Brazil's 44% Margin

América Móvil is the largest telecom operator in Latin America by subscribers, providing wireless, fixed-line, broadband and Pay TV services in 23 countries[1], and it is scheduled to hold its earnings call on 2026-10-21 to report results for the third quarter of 2026, ending September 30, 2026[2]. The latest disclosed period is the second quarter of 2026: consolidated revenue of 241,071 million pesos rose 3.1% year on year, with service revenue up 5.1% at constant exchange rates; EBITDA of 95,908 million pesos grew 3.8% at a 39.8% margin, or 6.7% excluding a one-off regulatory charge in Mexico; EBIT of 51,814 million rose 9.5%; comprehensive financing costs of 10,423 million rose 34.8%; and net income of 24,332 million pesos rose 9.2%, or 47 U.S. cents per ADR[3][4]. The quarter added 3.5 million postpaid subscribers and 531 thousand broadband accesses, bringing postpaid subscribers to 149.8 million (up 9.1%) and broadband accesses to 37.8 million (up 6.1%) at the end of June[5]. The company does not give quarterly revenue or profit guidance; on the July call management reaffirmed 2026 capital expenditure of about 7 billion U.S. dollars with only minor variation, said net debt would stay inside the 1.2x to 1.5x net debt to EBITDA target range, and said Brazil's recent promotional activity had not changed its view that long-term performance would remain strong[6]. The analyst consensus compiled by Drillr as of 2026-09-22, covering only 3 analysts for the quarter, puts third-quarter revenue at 243,506 million pesos, EBITDA at 95,715 million, net income at 22,146 million and earnings per ADR at 7.38 pesos[7]; the Drillr earnings calendar carries a dollar-based estimate of 0.46 U.S. dollars per ADR and revenue of 14.18 billion U.S. dollars[2].

Three things deserve attention in the third quarter. First, Mexican prepaid: mandatory line registration began suspending unregistered lines on August 15 in batches by the last digit of the number, and prepaid customers who miss their deadline lose service until they register[8], while Mexican mobile service revenue growth had just accelerated to 6.6% in the second quarter with prepaid revenue up 5.7%[9], so the third quarter is the first to show whether suspensions or the recharge recovery is the stronger force. Second, Brazil's margin: management acknowledged that Vivo turned more aggressive on pricing from May and that Claro has to match[10], yet Brazil's EBITDA margin held at 44.0% in the second quarter with mobile service revenue up 6.1%[11], so the third quarter is the first test of management's claim that promotions would fade in the third and fourth quarters. Third, operating leverage and financing costs under a strong peso: the peso appreciated 12.3% against the U.S. dollar in the second quarter, compressing 5.3% constant-currency EBITDA growth to 3.8% in reported pesos[12], and consensus puts third-quarter EBITDA only about 2% above the year-earlier level with net income of 22.1 billion pesos below the second quarter's 24.3 billion[7], so this quarter answers whether cost control can keep peso-reported profit growing through translation and financing-cost swings.

Company Background and Business Structure

América Móvil was spun off from Telmex in 2000, is headquartered in Mexico City and is controlled by the Carlos Slim family. It operates in 16 countries in the Americas and seven in Central and Eastern Europe, ranks first in Latin America in wireless, fixed-line, broadband and Pay TV by revenue generating units (RGUs), and Mexico and Brazil together account for more than half of its RGUs[1]. It runs wireless under the Telcel brand and fixed-line under Telmex in Mexico, uses the Claro brand in Brazil, Colombia, Peru, Argentina and other markets, and the A1 brand in Central and Eastern Europe. At the end of June 2026 it had 414.5 million access lines: 334.3 million wireless subscribers, including 149.8 million postpaid, and 80.2 million fixed-line RGUs made up of 37.8 million broadband accesses, 13.9 million Pay TV units and 28.4 million landlines[5].

On the 2025 annual segment basis, revenue was 943.6 billion pesos and operating income 191.4 billion. Mexico Wireless contributed 275.2 billion of revenue (29.2%) and 92.2 billion of operating income (48.2%); Mexico Fixed 114.0 billion (12.1%) and 16.2 billion; Brazil 183.0 billion (19.4%) and 36.2 billion; Europe 121.2 billion (12.8%) and 18.2 billion; Colombia 79.3 billion (8.4%) and 10.7 billion; the Andean region 57.3 billion, Central America 56.4 billion, the Caribbean 38.1 billion and Argentina 36.6 billion; and the Paraguay, Uruguay and Chile block posted 27.0 billion of revenue with an operating loss of 7.9 billion[13]. The two Mexican segments therefore supply 57% of group operating income, while more than half of revenue comes from the 22 markets outside Mexico, which makes translation between the reporting currency and local currencies the first layer in reading the consolidated figures.

By product and customer, wireless serves individuals (prepaid billed by recharge, postpaid by monthly fee) and businesses (M2M, corporate networks), while fixed-line serves households (broadband, Pay TV, landline) and businesses (corporate networks and IT solutions). Of second-quarter consolidated revenue of 241,071 million pesos, service revenue of 205,919 million was 85%, equipment sales were 33,433 million and other revenue 1,719 million; costs consisted of cost of service of 58,484 million (network operations, interconnection, content, energy), cost of equipment of 29,919 million, selling, general and administrative expenses of 53,505 million (including acquisition and customer service) and depreciation and amortization of 44,094 million[3]. Prepaid users pay before they consume and postpaid and fixed-line customers are billed monthly, so receivables cycles are short and operating cash flow reliably covers capital expenditure; the growth mechanism is to migrate prepaid users to postpaid and to bundle broadband with mobile into convergent plans, and postpaid and convergent customers churn noticeably less.

On assets and ownership relationships, the company holds a Verizon equity stake as a monetizable asset, with a fair value of 42.1 billion pesos at the end of 2025 and Verizon dividend income of 3.0 billion pesos in 2025[14]. In July 2025 it bought the remaining shares of Claro Chile from LLA UK Holding to reach 100% ownership; in March 2026 its Brazilian subsidiary agreed to acquire about 73% of Desktop, a fiber operator in the state of São Paulo, pending approval from Brazil's antitrust authority CADE and telecom regulator ANATEL[15]; and in July 2026 it announced an agreement to buy 100% of WOW Peru, a fiber broadband company, from Liberty Latin America and Narvik Capital Partners, subject to Peruvian competition approval, adding more than 3 million passed fiber homes and 500,000 existing customers[16][17]. In Brazil, all subscribers of NuCell, which operates as a commercial agent partner, are counted in Claro's reported base, but only the revenue the company retains is recorded, which limits the comparability of reported ARPU[18].

Financial History and Current Position

On the annual filing basis, total revenue rose from 869.2 billion pesos in 2024 to 943.6 billion in 2025, and operating income from 180.1 billion to 191.4 billion[13]. At the segment level, Mexico Wireless posted an adjusted operating margin of 43.4% in 2025 (43.5% in 2024), with the decline driven mainly by higher customer service center expenses[19]; Brazil's adjusted operating income was 34.2 billion pesos, up 16.6%, with postpaid subscriptions up 8.4% and prepaid down 6.4%[20]; and Mexico Fixed swung to an adjusted operating loss of 1.8 billion pesos from a 2.1 billion profit in 2024 because of higher contractual salaries and social benefits, network maintenance and IT solutions costs[21].

On capital expenditure and the balance sheet, spending on networks and licenses was 156.3 billion pesos in 2023, 130.8 billion in 2024 and 130.8 billion in 2025, and the 2026 budget is about 7.0 billion U.S. dollars (129.4 billion pesos), funded primarily by operating activities[22]. Total debt at the end of 2025 was 524.9 billion pesos (567.6 billion a year earlier), net debt on the annual-report definition was 447.5 billion (484.2 billion), cash was 35.0 billion and equity investments available for sale were 42.4 billion[23]. On shareholder returns, the 2025 dividend was 0.52 pesos per share, and in April 2026 the shareholders' meeting approved 0.54 pesos per share paid in two installments of 0.27 pesos and authorized a 10 billion peso buyback fund[15].

The latest interim position is the second quarter of 2026 (ended June 30): consolidated revenue of 241,071 million pesos rose 3.1% year on year, service revenue of 205,919 million rose 3.4%, total costs and expenses of 145,164 million rose 2.7%, EBITDA of 95,908 million rose 3.8% at a 39.8% margin (39.5% a year earlier), depreciation and amortization of 44,094 million fell 2.2%, EBIT of 51,814 million rose 9.5%, comprehensive financing costs of 10,423 million rose 34.8% and net income of 24,332 million rose 9.2%[3]. At constant exchange rates service revenue grew 5.1% and EBITDA 5.3%, or 6.7% excluding the one-off charge in Mexico; mobile service revenue grew 6.5%, with prepaid revenue up 5.3% and postpaid up 7.2%, and fixed-line service revenue growth accelerated to 2.7% from 1.7% in the first quarter[4]. For the first half, revenue of 477,915 million pesos rose 2.6%, EBITDA of 190,412 million rose 3.8% and net income of 47,733 million rose 16.5%[3].

By country, second-quarter Mexican revenue of 86,870 million pesos rose 3.2%, mobile service revenue of 49,027 million rose 6.6%, and EBITDA of 35,229 million rose only 0.6% at a 40.6% margin, or 4.3% excluding the Telmex fine[24][9]; Brazilian revenue of 13,469 million reais rose 5.4% and EBITDA of 5,920 million reais rose 5.1% at a 44.0% margin[11]; and Colombian mobile service revenue rose 10.5%, EBITDA rose 12.5% and the margin climbed from 39.4% to 41.9%[25]. On cash, first-half capital expenditure was 48.1 billion pesos, buybacks 4.6 billion and labor obligation payments 8.4 billion, all covered by cash flow, after which net debt fell 30.9 billion pesos in cash-flow terms; excluding capitalized leases, net debt was 402 billion pesos at the end of June, or 1.31 times last-twelve-month EBITDAaL[12].

Operating Model

Revenue equals service revenue plus equipment sales plus other revenue, with service revenue at 85% and split by platform into mobile and fixed-line: prepaid revenue is roughly active recharging users times average recharge, postpaid revenue is subscribers times monthly ARPU, and fixed-line revenue is broadband, Pay TV and corporate network growth minus landline attrition[3]. Each country earns revenue in local currency that is then translated into pesos, so peso-reported growth equals constant-currency growth plus the translation effect, which in the second quarter turned 5.1% into 3.4%[12]. Volume growth comes from postpaid net additions (up 9.1% year on year) and broadband net additions (up 6.1%)[5], and price growth from ARPU, which in the second quarter rose 5.9% to 194 pesos in Mexico[24], 6.6% in Colombia[25] and only 1.9% to 27 reais in Brazil[11]; Brazilian promotions and Mexican line registration are currently the most direct external disturbances to volume and price.

EBITDA equals total revenue minus cost of service, cost of equipment, SG&A and other expenses, which in the second quarter was 241,071 minus 145,164, or 95,908 million pesos at a 39.8% margin[3]. Cost of service moves with network scale and energy and content prices but was held to a 1.9% year-on-year decline by cost control in the second quarter; cost of equipment moves with handset volumes at a low margin; and SG&A carries acquisition and customer service spending. EBITDA growing faster than revenue is the company's core profit mechanism today, and management lists AI adoption across operations as a long-term cost lever[26], while one-off regulatory fines, a rising equipment mix and promotional acquisition costs are the three disturbances to the margin. Further down, EBIT equals EBITDA minus depreciation and amortization (44,094 million pesos in the second quarter, down 2.2%), and net income equals EBIT minus comprehensive financing costs (net interest, other financial expenses and foreign exchange results, 10,423 million in the quarter) minus income tax and minority interest[3]; management attributed the second-quarter rise in other financial expenses to accrued penalties on a legacy regulatory ruling and mark-to-market changes in foreign exchange hedges[18].

Operating cash flow is roughly EBITDA minus taxes, interest and labor obligation payments; after capital expenditure (130.8 billion pesos in 2025 and a 7 billion U.S. dollar budget for 2026)[22], dividends (0.54 pesos per share) and buybacks, the remainder goes to deleveraging and fiber acquisitions[15]. Net debt fell 30.9 billion pesos in cash-flow terms in the first half, and net debt excluding leases was 402 billion pesos at the end of June, or 1.31 times EBITDAaL[12]; management treats the 1.2x to 1.5x range as a hard constraint, ranks complementary fiber acquisitions (Desktop, WOW Peru) ahead of deleveraging and then buybacks, has no plans for large incremental buybacks, and treats the Verizon stake as a monetizable reserve with no timeline[17].

Industry and Competitive Position

Latin American telecom is intensely competitive on price, brand, service bundles, network coverage and quality, spectrum access and regulatory change. The company's multinational rivals are AT&T (Mexico), Telefónica (Vivo in Brazil, among others) and Millicom (several Central and South American countries), alongside national operators such as Telecom Argentina and Telecom Italia (TIM in Brazil). The annual report states that Telefónica is gradually exiting certain Latin American markets and that the company expects Millicom to become its second-largest competitor in the region by footprint and subscriber base, with possible effects including market share loss and pressure to cut rates[27].

Mexico is the company's most profitable market and the one with the most asymmetric regulation. Since 2014 the company and its Mexican subsidiaries Telcel, Telmex and Telnor, together with Grupo Carso and Inbursa, have been designated the telecom sector's "preponderant economic agent" and subject to obligations that apply to no other participant; a 2024 constitutional amendment dissolved the previous regulators, and in October 2025 the IFT was replaced by the Telecommunications Regulatory Commission (CRT), an agency of the federal executive branch, while the antitrust authority COFECE was replaced by the National Antitrust Commission (CNA), and the annual report expects the new bodies to be more aligned with the federal government's agenda and to have broader authority and greater sanctions[28]. Telmex's new concession took effect in March 2026 and Telnor's in May 2026, each for 30 years, but neither includes authorization for television or Pay TV, and the unified concession request filed in 2018 remains unresolved by the CRT[29].

In Brazil, Claro remained the leader in both prepaid and postpaid net additions and in mobile number portability through June, and its convergent customer base grew 15% year on year, but the company itself describes an "increasingly competitive environment and heightened promotional activity across the industry"[30]; on the call management said Vivo turned more aggressive on pricing from May, that promotions are concentrated in both prepaid and postpaid, that the company is matching competitor promotions to stay competitive, and that it neither controls competitor behavior nor has a fixed timeline for price increases[10]. 5G coverage is the company's main selling point for winning subscribers across its markets: Colombia's 5G network has expanded to 78 cities and towns and postpaid revenue there grew 10.2%, the strongest in more than seven years[25], and management in Mexico also cites leading 5G coverage as a factor attracting new subscribers[26]. One limit needs stating: the company discloses only segment revenue, EBITDA and operating income, not separate profits for prepaid, postpaid or broadband, and competitors' financials on the same basis are outside this article's comparison, so the advantages above rest mainly on observable differences in net additions, portability and margins.

Core Debates

With Mexico's mandatory line registration now suspending unregistered phones, will Telcel's recovering prepaid recharges hold up?

This debate matters because Mexico Wireless is América Móvil's most profitable segment, contributing 29.2% of revenue and 48.2% of operating income in 2025 at a 43.4% adjusted operating margin[13][19]. Telcel ended the second quarter with 84.53 million wireless subscribers, of which 68.42 million, more than 80%, were prepaid; ARPU of 194 pesos rose 5.9% year on year and churn fell from 3.0% to 2.6%[24]; prepaid service revenue growth accelerated from 4.6% in the first quarter to 5.7%, postpaid grew 7.7%, and together they pushed Mexican mobile service revenue growth to 6.6%[9]. The CRT extended the registration deadlines in batches by the last digit of the number to run from August 15 to December 31, and prepaid customers who do not register by their deadline will have service suspended and restored once they register[8]; the four batches for digits 0 to 3 all fall inside the third quarter, so this is the first quarter that can show whether suspensions or the recharge recovery is the stronger force.

The evidence for "the recovery continues" comes from the demand side. Management said prepaid growth is driven by an improving Mexican economy in which prepaid customers are recharging higher-value cards and using more data, the active recharging base is growing, sectors such as automobile sales and restaurants are already booming and correlate directly with recharge growth, and leading 5G coverage is attracting new subscribers[26]. Telcel added 247 thousand wireless subscribers in the second quarter, including 101 thousand postpaid, and remained a net gainer in mobile number portability[9], which implies prepaid net additions of about 146 thousand.

The alternative reading is that suspensions actively interrupt this curve. Among the call's risks, management acknowledged that a large volume of existing prepaid subscribers is still completing registration under staggered deadlines and that implementation remains uncertain[31]. Expansión, citing regulator data, reported that as of June 25 only 63 million lines (39.1%) had completed registration, of which 40.2 million were prepaid and 22.8 million postpaid, leaving 98 million lines pending, and that the CRT's new rules place the burden of individual SMS notifications and suspension within 72 hours of the deadline on Telcel, AT&T and the other operators[32]. A suspended line can only make emergency calls and is restored on registration, so the effect may show up as negative prepaid net additions in the third quarter and a recovery in the fourth; because execution sits with the operators, the company has an incentive to slow enforcement to protect its recharging base.

The financial transmission runs as follows: suspensions halt unregistered prepaid lines and some users give up on renewing, the active recharging base shrinks, prepaid service revenue growth slows, and the pressure lands on Mexico Wireless revenue and EBITDA (35,229 million pesos in the second quarter at a 40.6% margin)[24]; if higher recharge amounts and 5G migration offset the suspensions, growth holds. The third quarter should show whether Mexican mobile service revenue growth stays above 6% and prepaid growth above 5%, whether prepaid net additions turn negative and the company names registration suspensions as the cause, and which way ARPU and churn move: if suspensions only clear low-value lines, ARPU rises while revenue stays flat, whereas if promotions are used to keep lines alive, ARPU weakens first. The observable falsifiers are a third-quarter prepaid net loss attributed by the company to suspensions with prepaid revenue growth falling back below 3%, or prepaid revenue growth holding while ARPU turns negative year on year; the six batches for digits 4 to 9 are still to come in the fourth quarter, so the third quarter is the leading sample for the first four.

After Vivo escalated promotions, does Claro Brasil's postpaid-migration story still protect its 44% EBITDA margin?

Brazil is América Móvil's second-largest segment by revenue and its fastest-growing by profit: 2025 segment revenue was 183.0 billion pesos, 19.4% of the total, and adjusted operating income rose 16.6%, driven mainly by commercial efforts to convert prepaid subscribers to postpaid[13][20]. In the second quarter Brazil's EBITDA was 5,920 million reais at a 44.0% margin, essentially unchanged from 44.1% a year earlier; of 92.26 million wireless subscribers, 61.19 million, two-thirds, were postpaid, prepaid subscribers of 31.07 million were down 3.3%, ARPU of 27 reais rose 1.9% and churn fell from 2.6% to 2.0%[11]. Brazil contributed 1.5 million of the group's 3.5 million postpaid net additions in the quarter[5], but management acknowledged that Vivo turned more aggressive on pricing from May and that the company must match, and Brazilian mobile service revenue growth has slipped to 6.1% from last year's higher pace[10][11], so the third quarter is the first test of the claim that promotions will fade.

The evidence for "the margin holds" is structural. Postpaid revenue rose 7.1% in the second quarter, the convergent (fixed plus mobile) customer base grew 15% year on year and is described by the company as a key driver of retention and revenue growth, Claro remained the leader in prepaid and postpaid net additions and in portability through June, and fixed-line service revenue growth accelerated from 2.6% in the first quarter to 4.1%[30]. The company is also reinforcing its convergent base with acquisitions such as Desktop, a fiber operator in the state of São Paulo[15], and management stressed that despite near-term competition Brazilian revenue growth had improved sequentially from 1.5% to 4.1% and that long-term performance would remain strong[6].

The alternative reading, "the margin does not hold", also has data behind it. Brazilian mobile service revenue growth has slowed for three consecutive quarters, from 9.1% in the second quarter of 2025 through 8.0% to 6.1%, ARPU rose only 1.9% and prepaid subscribers fell 3.3% year on year[11]; of the 1.5 million postpaid net additions in the second quarter, 680 thousand were M2M units, leaving only 820 thousand human postpaid additions[30]; and management admitted it does not control competitor behavior and has no timeline for price increases[10]. Seu Dinheiro reported in September that TIM withdrew its 20 reais per month hybrid annual plan, with its entry price returning to 30 reais, and that Vivo dropped a similar ultra-cheap product, prompting BofA analysts to conclude that the industry is entering a "more rational" pricing phase; but the same report noted that Claro's new plans still use zero-rated WhatsApp as an acquisition hook, a tactic Vivo and TIM have already eliminated, and that entry-level prepaid and hybrid plans face the highest repricing risk[33].

The financial transmission is that Vivo and TIM entry-plan promotions force Claro to match (entry products such as ClaroFlex, zero-rated WhatsApp), Brazilian ARPU growth and prepaid revenue come under pressure while acquisition costs rise, and mobile service revenue growth slows as the EBITDA margin slips; postpaid migration and convergent customers lift ARPU and retention and offset the promotional pressure, and when promotions fade, ARPU and margin recover together. The third quarter should show whether Brazilian mobile service revenue growth stabilizes above 6%, how postpaid net additions split between M2M and human subscribers and whether ARPU re-accelerates, whether the Brazilian EBITDA margin holds 44% and whether the company describes competition as "intensifying" or "easing", and whether Claro follows Vivo and TIM in dropping zero-rated WhatsApp or raising entry prices. The observable falsifiers are third-quarter ARPU turning negative year on year with mobile service revenue growth falling below 4%, or postpaid net additions propped up by M2M while human postpaid declines and the margin falls below 43%.

With the peso this strong, can América Móvil's cost discipline keep peso-reported EBITDA growing?

América Móvil reports in Mexican pesos, but more than half of its revenue comes from 22 markets outside Mexico, including Brazil, Colombia and Europe[13]. In the second quarter of 2026 the peso appreciated 12.3% year on year against the U.S. dollar and 9.6% against the euro, was flat against the Brazilian real and depreciated 3.3% against the Colombian peso, which compressed constant-currency service revenue growth of 5.1% to 3.4% and EBITDA growth of 5.3% to 3.8%[12]. Management has repeatedly stressed that EBITDA grows faster than revenue because it is controlling costs[26], while consensus puts third-quarter EBITDA at only 95,715 million pesos and EBIT at 51,661 million[7], roughly 2% above the 93.8 billion pesos the company reported for the third quarter of 2025. This quarter answers whether operating leverage is enough to sustain peso-reported growth under a strong peso, and whether financing costs again pull net income away from EBITDA.

The evidence for "growth continues" sits on the cost line. Second-quarter cost of service of 58,484 million pesos fell 1.9% year on year, total costs of 145,164 million rose only 2.7% against 3.1% revenue growth, the margin of 39.8% beat the year-earlier 39.5%, and the first-half margin was likewise 39.8% against 39.4%[3]. Volume growth is intact, with postpaid subscribers up 9.1% and broadband accesses up 6.1%[5], Colombia's margin climbed from 39.4% to 41.9% on operating leverage and cost control[25], and management lists AI adoption across operations as a long-term initiative to cut costs and improve customer insight in support of EBITDA outgrowing revenue[26].

The alternative reading, "growth stalls", looks at the trend and the lower half of the income statement. Constant-currency EBITDA growth is itself slowing, from 8.0% in the first quarter to 5.3% in the second; Mexican EBITDA rose only 0.6% in the second quarter because of the one-off Telmex fine[9]; comprehensive financing costs rose 34.8% to 10,423 million pesos, with other financial expenses up 38.2% to 6,862 million and smaller foreign exchange gains than a year earlier[3], which management attributed to accrued penalties on a legacy regulatory ruling and mark-to-market changes in currency hedges[18]. Second-quarter net income of 24,332 million pesos rose 9.2%[3], but consensus puts third-quarter net income at only 22,146 million pesos[7], below the second quarter and below the 22.7 billion the company reported for the third quarter of 2025, which suggests the market has already priced in uncertainty over financing costs and foreign exchange results.

The transmission chain is: local-currency service revenue growth in each country (mobile up 6.5%, fixed-line up 2.7%) plus cost control (cost of service down 1.9%) lifts constant-currency EBITDA growth above revenue growth, and peso appreciation then shrinks it in translation to give peso-reported EBITDA and EBIT[4][3]; EBIT minus comprehensive financing costs (net interest, accrued penalties, hedge mark-to-market, foreign exchange results) and taxes gives net income, and currency and financing costs are the largest source of noise between EBITDA and net income. The third quarter should show whether peso-reported EBITDA exceeds the 95.7 billion consensus and the 93.8 billion year-earlier level and whether the margin holds 39.8%, whether constant-currency EBITDA growth still exceeds constant-currency service revenue growth (5.3% versus 5.1% in the second quarter, 6.7% excluding the one-off), whether comprehensive financing costs fall back below 10 billion pesos and the penalty accruals end, and whether the peso's year-on-year moves against the dollar and euro narrow. The observable falsifiers are constant-currency EBITDA growth falling below service revenue growth, meaning operating leverage itself is weakening, or peso-reported EBITDA turning negative year on year with currency unable to explain the whole gap.

With over 80 billion pesos of capex still to spend this year plus two fiber acquisitions, how much leverage headroom does América Móvil really have?

América Móvil reinvests about 14% of revenue in its networks every year, with capital expenditure of 130.8 billion pesos in 2025 and a 2026 budget of about 7 billion U.S. dollars, or 129.4 billion pesos[22]. Only 48.1 billion pesos was spent in the first half[12], yet management stated that a stronger peso raises the peso cost of dollar-denominated spending rather than reducing it and that the budget will not be cut[6], which pushes roughly 81 billion pesos of spending into the second half. At the same time the company ranks fiber acquisitions ahead of incremental buybacks: about 73% of Desktop in Brazil is awaiting CADE and ANATEL approval[15], and WOW Peru awaits competition approval[16]. Leverage was 1.31x at the end of June, only 0.19x below the 1.5x ceiling, which on second-quarter EBITDAaL implies about 60 billion pesos of net debt headroom[12][6], so the third quarter is the first in which accelerating spending, deal closings and the leverage constraint must all hold at once.

The evidence for "ample headroom" is the cash flow itself. First-half cash flow covered 48.1 billion pesos of capital expenditure, 4.6 billion of buybacks and 8.4 billion of labor obligations, and with 1.1 billion of net dividend income, net debt still fell 30.9 billion pesos in cash-flow terms[12]; total debt fell from 567.6 billion to 524.9 billion pesos during 2025 and annual-report net debt from 484.2 billion to 447.5 billion[23]; the balance sheet still carries a 42.1 billion peso Verizon stake that can be monetized[14], and management said it has no timeline for that but will prioritize a strong balance sheet to pursue acquisitions[17]. The 10 billion peso buyback authorization and the 0.54 peso dividend (0.52 last year) approved in April also show that shareholder returns have not been crowded out by deals[15].

The alternative reading, "headroom is tight", looks at how second-half outflows stack up. The budget implies about 81 billion pesos of spending in the second half, some 70% more than in the first; Desktop's base equity consideration is about 2.4 billion reais and WOW's price is undisclosed, and if both close before the fourth quarter they lift net debt directly; and management has said there are no plans for large incremental buybacks, so the ordering is acquisitions, deleveraging and then buybacks[17]. Broadband net additions have exceeded 500 thousand for three consecutive quarters, with the second quarter's 531 thousand made up of 170 thousand in Mexico, 83 thousand in Brazil and 74 thousand in Colombia[5], but Brazil's fixed-line RGUs still fell by 49 thousand in the quarter[30], so fiber investment takes time to turn into fixed-line revenue.

The financial transmission is that faster capital expenditure plus acquisition payments reduce free cash flow, push net debt back up and lift leverage, which limits buyback room; on the other side, wider fiber coverage raises broadband net additions and broadband revenue growth, fixed-line service revenue and EBITDAaL grow, and the leverage denominator expands. The third quarter should show whether cumulative capital expenditure rises above 85 billion pesos and the company reaffirms the 7 billion dollar budget, whether leverage at quarter-end stays between 1.25x and 1.45x and whether the sequential change in net debt includes deal closings, whether buybacks continue and the second 0.27 peso dividend installment is paid on schedule, and whether Desktop's CADE and ANATEL approvals and WOW's INDECOPI approval come with conditions. The observable falsifiers are cumulative capital expenditure below 80 billion pesos with a budget cut, meaning investment is being replaced by peso strength, or leverage breaking above 1.5x with buybacks suspended.

Risks and Falsifiers

The first risk is that Mexico's asymmetric regulation tightens under the new agencies. As the "preponderant economic agent" the company carries obligations that apply to it alone, the 2025 law replaced the IFT with the CRT and COFECE with the CNA, and the annual report expects the new bodies to have broader authority and impose greater sanctions[28]; Telmex booked a one-off regulatory fine in the second quarter that cut Mexican EBITDA growth from 4.3% to 0.6%, roughly 1.3 billion pesos[9], a 1.3 billion peso fine on Telnor became binding in June, though management does not expect further similar fines[31], and the new Telmex and Telnor concessions still exclude Pay TV[29]. The exposed line is Mexico's 108.4 billion pesos of 2025 segment operating income (92.2 billion wireless plus 16.2 billion fixed), 57% of the group[13]; if the third quarter brings no new regulatory fine or one-off charge in Mexico and the company discloses no new asymmetric obligations from the CRT, the risk has not materialized in the quarter.

The second risk is the drag from the Southern Cone. Argentina reports under IAS29 hyperinflation accounting and is excluded from constant-currency comparisons[3]; the Paraguay, Uruguay and Chile block posted 27.0 billion pesos of revenue in 2025 with an operating loss of 7.9 billion and a margin of negative 29.3%, and Argentina's reported operating income was only 1.0 billion against 13.4 billion adjusted, so the accounting differences make consolidated operating income sensitive to inflation assumptions[13]; the Chile integration only reached 100% ownership in July 2025[15], and Argentine competition authority rulings on market consolidation add near-term uncertainty[31]. The falsifier is continued year-on-year EBITDA improvement in the Paraguay, Uruguay and Chile block in the third quarter with no subscriber or revenue decline in Argentina from the competition rulings.

The third risk is that registration suspensions land concentrated in the third and fourth quarters. Unregistered prepaid lines stop recharging once suspended, and Telcel's active recharging base contracts involuntarily[8][31]. The exposed line is Mexico's roughly 49 billion pesos of quarterly mobile service revenue, about half of which is prepaid on a subscriber-mix basis[24]; each percentage point of lost prepaid revenue growth is worth about 250 million pesos of quarterly revenue, and because incremental prepaid costs are minimal, nearly all of it flows through to Mexican EBITDA (35.2 billion pesos in the second quarter). The falsifier is non-negative Mexican prepaid net additions in the third quarter with prepaid revenue growth of at least 5%.

The fourth risk is a prolonged Brazilian promotional war. If Claro keeps matching Vivo and TIM entry-plan pricing to protect its net-addition lead, stagnant ARPU and rising acquisition costs squeeze Brazilian EBITDA at the same time[10]. The exposed line is Brazil's second-quarter EBITDA of 5,920 million reais and 44.0% margin[11]; each percentage point of margin is worth about 135 million reais of quarterly EBITDA, or roughly 460 million pesos at second-quarter exchange rates. The falsifier is a third-quarter Brazilian EBITDA margin of at least 44% with mobile service revenue growth of at least 6%.

The fifth risk is continued peso appreciation combined with volatile financing costs. Foreign EBITDA shrinks in translation while accrued penalties, hedge mark-to-market and foreign exchange losses pull net income off the EBITDA track[12][18]. The exposed line is comprehensive financing costs, 10,423 million pesos in the second quarter and 2.7 billion more than a year earlier[3]; translation cost about 1.5 percentage points of second-quarter EBITDA growth, roughly 1.4 billion pesos, and consensus puts third-quarter net income at 22.1 billion pesos, below the second quarter's 24.3 billion[7]. The falsifier is third-quarter comprehensive financing costs of no more than 12 billion pesos with peso-reported EBITDA of at least 95.7 billion.

The sixth risk is that second-half capital expenditure acceleration and the two fiber acquisitions land together. That would push leverage toward the 1.5x ceiling and force a pause in buybacks while fiber revenue lags by several quarters[6][17]. The magnitudes are about 81 billion pesos of remaining second-half capital expenditure[22], Desktop's base equity consideration of about 2.4 billion reais (roughly 8.2 billion pesos)[15] and about 60 billion pesos of net debt headroom between 1.31x and 1.5x[12]. The falsifier is quarter-end leverage of no more than 1.45x with buybacks continuing.

What to Watch Next

The four debates reduce to the following checks against the third-quarter report, each with its second-quarter reference point and its confirming or falsifying condition.

• Mexican prepaid and line suspensions: Mexican mobile service revenue growth, prepaid revenue growth, prepaid net additions and ARPU. Second-quarter reference: mobile service revenue of 49,027 million pesos (up 6.6%), prepaid revenue up 5.7%, prepaid net additions of about 146 thousand, ARPU of 194 pesos (up 5.9%). Watch whether growth stays above 6% and 5%, whether net additions turn negative and are attributed to suspensions, and which way ARPU and churn move. Confirmed if prepaid net additions are non-negative and prepaid growth is at least 5%; falsified if prepaid subscribers fall and growth drops back below 3%, or ARPU turns negative year on year.
• Brazilian promotions and postpaid migration: Brazilian mobile service revenue growth, the split of postpaid net additions, ARPU and the EBITDA margin. Second-quarter reference: mobile service revenue of 7,466 million reais (up 6.1%), postpaid net additions of 1.5 million (including 680 thousand M2M), ARPU of 27 reais (up 1.9%), margin of 44.0%. Watch whether growth stabilizes above 6%, whether the margin holds 44%, and whether Claro drops zero-rated WhatsApp or raises entry prices. Confirmed if the margin is at least 44% and growth at least 6%; falsified if ARPU turns negative and growth falls below 4%, or human postpaid declines and the margin falls below 43%.
• Operating leverage and financing costs under a strong peso: peso-reported EBITDA and margin, constant-currency EBITDA growth versus service revenue growth, and comprehensive financing costs. Second-quarter reference: EBITDA of 95,908 million pesos (up 3.8%, 5.3% at constant currency, 6.7% excluding the one-off) at a 39.8% margin, constant-currency service revenue up 5.1%, comprehensive financing costs of 10,423 million. Watch whether EBITDA exceeds the 95.7 billion consensus and the 93.8 billion year-earlier level and whether financing costs return below 10 billion. Confirmed if financing costs are no more than 12 billion and EBITDA at least 95.7 billion; falsified if constant-currency EBITDA growth falls below service revenue growth, or peso-reported EBITDA turns negative year on year.
• Capital expenditure, fiber acquisitions and leverage headroom: cumulative capital expenditure, net debt to EBITDAaL, buybacks and dividends, and the Desktop and WOW approvals. Second-quarter reference: first-half capital expenditure of 48.1 billion pesos, net debt of 402 billion at 1.31x, first-half buybacks of 4.6 billion, broadband net additions of 531 thousand. Watch whether cumulative spending rises above 85 billion, whether leverage stays between 1.25x and 1.45x, and whether approvals carry conditions. Confirmed if leverage is no more than 1.45x and buybacks continue; falsified if spending falls short of 80 billion with a budget cut, or leverage breaks 1.5x with buybacks suspended.

Conclusion

América Móvil's business is driven by three lines: the active recharging base and recharge amounts of Mexican prepaid, Brazil's migration from prepaid to postpaid and convergent plans, and the operating leverage that survives once local-currency revenue is translated into pesos. All three were working in the second quarter of 2026: consolidated revenue of 241,071 million pesos rose 3.1%, EBITDA of 95,908 million rose 3.8% at a 39.8% margin[3], Mexican mobile service revenue growth accelerated to 6.6%[9], Brazil's margin held at 44.0%[11], and net debt fell 30.9 billion pesos in the first half with leverage at 1.31x[12]. The central unresolved relationship is whether the registration suspensions and Brazilian promotion-matching arriving together in the third quarter slow volume growth, and whether the strong peso and financing costs separate the lower half of the income statement from EBITDA.

Independent reporting published after the second-quarter results points in opposite directions on the two debates. Expansión's Ana Luisa Gutiérrez, citing CRT data, reported that only 39.1% of lines had completed registration by June 25 with 98 million pending, that the regulator shifted the burden of individual notifications and 72-hour suspensions onto Telcel, AT&T and the other operators, and that telecom lawyer Jorge Moreno Loza considers the new extension insufficient to fix the data protection and consent failures of the first phase[32]; this suggests the potential scale of third-quarter suspensions is far larger than the "encourage customers to complete registration" language in the company's report implies, and that the pace of enforcement sits with the operators. Seu Dinheiro's Giovanna Figueredo reported that TIM and Vivo withdrew their 20 reais ultra-cheap plans and quoted BofA analysts concluding that the industry is entering a "more rational" pricing phase with room for later price increases, while noting that Claro's new plans still rely on zero-rated WhatsApp to win subscribers[33]. One report adds to the downside risk on Mexican prepaid and the other supports the claim that Brazilian promotions are fading; both are outside interpretations rather than evidence of third-quarter results.

Looking ahead, the combination that would materially strengthen the current understanding is non-negative Mexican prepaid net additions in the third quarter with prepaid revenue growth of at least 5% and ARPU still rising, Brazilian mobile service revenue growth stabilizing above 6% with a margin of at least 44% and human postpaid additions no longer propped up by M2M, peso-reported EBITDA above 95.7 billion with comprehensive financing costs back below 10 billion, and cumulative capital expenditure above 85 billion pesos with leverage still within 1.45x and buybacks continuing. Conversely, if prepaid subscribers fall and the company blames suspensions, Brazilian ARPU turns negative year on year, constant-currency EBITDA growth drops below service revenue growth, or leverage breaks 1.5x with buybacks suspended, and two or more of these occur together, the understanding that cost control plus postpaid migration can absorb external shocks would need to be rewritten.

Sources

[1] AMX 20-F filed 2026-04-28 · business overview · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[2] Drillr earning_call_calendar (updated 2026-09-22) · AMX earnings call 2026-10-21 · 2026-09-22 · Drillr earning_call_calendar · https://gateway.drillr.ai/mcp/private

[3] AMX 6-K filed 2026-07-23 · 2Q26 consolidated income statement · 2026-07-23 · 6-K · https://www.sec.gov/Archives/edgar/data/1129137/000114036126029404/

[4] AMX 6-K filed 2026-07-23 · 2Q26 highlights · 2026-07-23 · 6-K · https://www.sec.gov/Archives/edgar/data/1129137/000114036126029404/

[5] AMX 6-K filed 2026-07-23 · 2Q26 access lines · 2026-07-23 · 6-K · https://www.sec.gov/Archives/edgar/data/1129137/000114036126029404/

[6] AMX 2Q26 earnings call 2026-07-22 · guidance on capex, leverage and Brazil · 2026-07-22 · earnings call · https://www.americamovil.com/investors

[7] Drillr analyst_financial_estimates (updated 2026-09-22) · 3Q26 and FY2026 estimates · 2026-09-22 · Drillr analyst_financial_estimates · https://gateway.drillr.ai/mcp/private

[8] AMX 6-K filed 2026-07-23 · 2Q26 Mexico mobile registration · 2026-07-23 · 6-K · https://www.sec.gov/Archives/edgar/data/1129137/000114036126029404/

[9] AMX 6-K filed 2026-07-23 · 2Q26 Mexico commentary · 2026-07-23 · 6-K · https://www.sec.gov/Archives/edgar/data/1129137/000114036126029404/

[10] AMX 2Q26 earnings call 2026-07-22 · Brazil competition Q&A · 2026-07-22 · earnings call · https://www.americamovil.com/investors

[11] AMX 6-K filed 2026-07-23 · 2Q26 Brazil table · 2026-07-23 · 6-K · https://www.sec.gov/Archives/edgar/data/1129137/000114036126029404/

[12] AMX 6-K filed 2026-07-23 · 2Q26 consolidated commentary, FX, capex and net debt · 2026-07-23 · 6-K · https://www.sec.gov/Archives/edgar/data/1129137/000114036126029404/

[13] AMX 20-F filed 2026-04-28 · FY2025 segment results table · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[14] AMX 20-F filed 2026-04-28 · Verizon equity investment · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[15] AMX 20-F filed 2026-04-28 · dividends, buyback fund and Desktop acquisition · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[16] AMX 6-K filed 2026-07-23 · WOW Peru acquisition · 2026-07-23 · 6-K · https://www.sec.gov/Archives/edgar/data/1129137/000114036126029404/

[17] AMX 2Q26 earnings call 2026-07-22 · capital allocation and M&A Q&A · 2026-07-22 · earnings call · https://www.americamovil.com/investors

[18] AMX 2Q26 earnings call 2026-07-22 · financial expenses and NuCell Q&A · 2026-07-22 · earnings call · https://www.americamovil.com/investors

[19] AMX 20-F filed 2026-04-28 · Mexico Wireless segment 2025 · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[20] AMX 20-F filed 2026-04-28 · Brazil segment 2025 · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[21] AMX 20-F filed 2026-04-28 · Mexico Fixed segment 2025 · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[22] AMX 20-F filed 2026-04-28 · capital expenditures and 2026 budget · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[23] AMX 20-F filed 2026-04-28 · borrowings and net debt · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[24] AMX 6-K filed 2026-07-23 · 2Q26 Mexico table · 2026-07-23 · 6-K · https://www.sec.gov/Archives/edgar/data/1129137/000114036126029404/

[25] AMX 6-K filed 2026-07-23 · 2Q26 Colombia commentary and table · 2026-07-23 · 6-K · https://www.sec.gov/Archives/edgar/data/1129137/000114036126029404/

[26] AMX 2Q26 earnings call 2026-07-22 · Mexico prepaid Q&A · 2026-07-22 · earnings call · https://www.americamovil.com/investors

[27] AMX 20-F filed 2026-04-28 · competitors · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[28] AMX 20-F filed 2026-04-28 · Mexico legal framework and preponderant agent · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[29] AMX 20-F filed 2026-04-28 · concession migration and Pay TV · 2026-04-28 · 20-F · https://www.sec.gov/Archives/edgar/data/1129137/000114036126017486/

[30] AMX 6-K filed 2026-07-23 · 2Q26 Brazil commentary · 2026-07-23 · 6-K · https://www.sec.gov/Archives/edgar/data/1129137/000114036126029404/

[31] AMX 2Q26 earnings call 2026-07-22 · regulatory risks: Telnor fine and prepaid registration · 2026-07-22 · earnings call · https://www.americamovil.com/investors

[32] Expansión 2026-07-31 · CRT responsabiliza a Telcel, AT&T y operadoras el éxito del registro telefónico · 2026-07-31 · Expansión · https://expansion.mx/empresas/2026/07/31/crt-responsabiliza-telcel-att-operadoras-exito-registro

[33] Seu Dinheiro 2026-09-09 · É o fim dos planos de celulares de R$ 20? Por que as operadoras estão deixando ofertas ultrabaratas para trás · 2026-09-09 · Seu Dinheiro · https://www.seudinheiro.com/2026/empresas/e-o-fim-dos-planos-de-celulares-de-r-20-por-que-as-operadoras-estao-deixando-ofertas-ultrabaratas-para-tras-giov/