Latin America Telecom Services

Goldman Sachs initiates coverage on LatAm telecoms with a cautious stance on valuation, preferring América Móvil (Buy) over TIM Brasil (Neutral) and Telefônica Brasil (Sell).

Key Takeaways

• 1.Goldman Sachs initiates coverage of Latin American telecoms with a selective approach: Buy on América Móvil (AMX), Neutral on TIM Brasil (TIMB), and Sell on Telefônica Brasil (VIV) due to high sector valuations despite positive fundamentals.
• 2.The Brazilian mobile market has transitioned into a rational triopoly (Vivo, Claro, TIM) following Oi's asset de-consolidation in 2022, leading to lower churn and inflation-linked ARPU growth.
• 3.Broadband competition is shifting toward consolidation and 'convergence' bundling (mobile + fiber), with major players acquiring regional ISPs to reduce churn.

Table of Contents

• PM Summary: our thesis in 10 charts
• Discussion #1: Rational Competition and Price Dynamics in the Mobile Segment
• Discussion #2: Broadband is becoming increasingly strategic for LatAM telcos
• Discussion #3: Shareholder returns should gradually become the main priority
• Discussion #4: Assessing valuation through different frameworks; seeking relative preferences in an expensive sector
• Company pages
• Appendix
• Disclosure Appendix

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