After knowing the decision of WOM to initiate a business reorganization process before the Superintendence of Companies for the payment of debts, the financial situation experienced by mobile operators in the country has once again become evident, thus awakening uncertainty in the telecommunications sector.
According to the latest data revealed by the Supersociedades, in the report of the 1,001 companies, in 2022 the sum of the assets of the largest operators in the country (Claro, Telefónica-Movistar, Tigo, ETB and WOM) It reached $14.6 billion, which meant a contraction of 7% compared to 2021 when the figure rose to $15.6 billion.
It should be noted that of this group, the one that reported a marked decrease in its assets in 2022 was WOM, since the figure stood at $1 billion.
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Now, compared to the sum of the profits of these five operators It is highlighted that in 2022, the figure amounted to $47,682 millionwhich translated into a contraction of 94%, since profits in 2021 totaled $768.9 billion.
By disaggregating the data by operator we find that the utilities of Clear In 2022 they were $1.7 trillion, with a drop of 10%, since the data reported in 2021 reached $1.9 trillion. For its part, Telefónica-Movistar reported losses of $79,132 million, which represented a drop of 78%, because in 2021 its profits reached $101,589 million.
Mobile operators
The operator Tigo, which during 2023 went through financial difficulties, ending up with a capitalization of $600,000 million, reported losses in 2022 of $254,073 million, with a drop of 60% compared to the figure for 2021, when losses reached $638,497 million.
In the case of WOM, the losses recorded in 2022 reached $1.4 trillion, which meant an increase of 77% compared to the losses they registered in 2021 ($824,351 million). In the case of ETB, the profits reported in 2022 were $49,093 millionwith a contraction of 64% compared to the 2021 figure ($135,305 million).
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It is worth noting that the sum of the operating income of the five companies in 2022 reached $27.2 billion, which meant an increase of 12% compared to 2021, when the registered figure was $24 billion.
But although experts in the sector have highlighted that the situation of mobile operators has been complicated by the high prices of the spectrum and the current situation of the markets, the truth is that the sector has not been exempt from other macroeconomic phenomena such as inflation, high interest rates and exchange rate volatility. In fact, several months ago, when the operator Tigo was facing a liquidity crisis, the company stated that one of the main reasons for the situation was due to the high investments made in recent years and the impact that arose from the pandemic.
Mobile operators.
This situation that Tigo experienced is not at all far removed from the financial reality that WOM is experiencing today. He CEO of this company, Ramiro Lafargarecently stated that the decision to enter into a business reorganization process did not imply the liquidation of the company, but quite the opposite, the measure was “to improve the financial year in the short term”, while maintaining the operation.
“Our main shareholder, together with Deutsche Bank, is evaluating alternatives to achieve the required financing and ensure its sustainability.”Lafarga framed.
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In the face of the financial challenges faced by operators in the country, the ICT Minister, Mauricio Lizcano, stated that although this was a “normal course of business“, the truth is “The Government will seek to ensure that companies continue operating”.
“Business reorganization is a very important mechanism for companies to save themselves and we hope that this process will allow WOM to continue providing the service. In the past we already helped Tigo. Of course it is worrying that a company goes into reorganization, but precisely this measure will allow them time to settle in and obtain the funds.”said Lizcano.
In an interview with Blu Radio, Superintendent of Societies, Billy Escobarpointed out that to save the WOM operator it would be necessary to inject at least $400,000 million.
Cell phones
By contrast, Andrés Duarte, Financial Analysis Manager at Corficolombianapointed out that lenders and banks could restrict resources to the sector both due to a deterioration in credit quality due to default (delay in payments) and due to the expectation of a deterioration in the sector.
“In the case of WOM, the aggressive campaign to penetrate the local market and increase its participation surely required a sacrifice in profitability, along with high placation (…) However, the projections of the payment capacity of these companies also should take into account revenue expectations associated with recently won auctions“Duarte added.
JOHANA LORDUY
Portfolio Journalist
