América Móvil to invest US$500mn in AMX-1 cable launch

Thursday, March 7, 2013

Telecoms giant América Móvil (NYSE: AMX), which in Brazil controls telcos Claro, Embratel and NET, announced a 1bn-real (US$509mn) investment for the launch of the AMX-1 submarine cable system, being built by French telecoms equipment manufacturer Alcatel-Lucent (NYSE: ALU).

In a statement, the company says the 17,500km-length structure, which will connect seven countries and have eleven landing points, is strategic for the group particularly due to the major international events Brazil will host in the next few years.

According to AMX operations director Ángel Alija, the network upgrade is crucial to supporting the country's telecommunications expansion.

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New telecoms services to be offered to customers of Claro, Embratel and NET once the cable is completed, include 4G applications, HDTV transmission and advanced multimedia, according to the operator.

The AMX-1 project has been overseen by experts from Embratel since 2011 and the first installations in Brazilian territory are slated for March this year, says the company.

Embratel president José Formoso says the networks of the Brazilian telcos controlled by AMX are already interconnected, which will ensure high reliability and capacity for domestic and international traffic when the cable is completed.

América Móvil expects the network to be ready for the offer of new services by the end of this year; a timeframe echoed by Alcatel-Lucent executives in a press conference at the Mobile World Congress held last week in Barcelona.