Friday, February 22, 2008

Iusacell Announces EBITDA Growth of 71% in 4Q07 to Ps.818 Million

Grupo Iusacell, S.A.B. de C.V. (BMV: CEL; LATIBEX: XCEL) ("Iusacell"), a wireless cellular and PCS service provider in Mexico with a national footprint, announced today a 41% increase in net revenue and a 71% rise in EBITDA during the quarter. For the full year 2007, net revenue and EBITDA grew 28% and 46%, respectively.
"A rising demand for world class technology services and very competitive and innovating commercial plans, generated a substantial increase in the quarter's sales," said Gustavo Guzman, Grupo Iusacell Chief Executive Officer. "Revenue coming from value added service, incoming roaming, rents and interconnection, were particularly outstanding."

"Higher revenue and effective cost controls were translated, once again, into outstanding profitability growth. In annual terms the behavior was similar; and we anticipate that the rising preference for our superior 3G solutions, together with enhanced operating efficiencies and synergies optimization from the merger with Unefon that are still to be realized, constitute a very important platform for our 2008 results going forward," added Mr. Guzman.

Fourth Quarter Results
As previously announced, the merger between Grupo Iusacell and Unefon Holdings took place in the second quarter 2007, thus the fourth quarter financial results are consolidated figures.

4Q 2006 4Q 2007 Change
Ps. %

Net Revenue Ps.2,127 Ps.2,993 Ps.866 41%

EBITDA Ps. 477 Ps. 818 Ps. 341 71%

Net Income Ps. 1,054 Ps. 346 Ps. (707) -67%

Millions of pesos of constant purchasing power as of December 31, 2007.
EBITDA: Revenue less cost and operating expenses

Net Revenue

Net revenue during the quarter was Ps.2,993 million, a 41% increase from the Ps.2,217 million in the same period of 2006. Growth is due mainly to sales increase in added value services, incoming roaming revenues and link- connection rents, growth in air time and postpaid rents and revenue from the Nationwide Calling Party Pays service.

Subscribers Base

As of December 31, 2007, Grupo Iusacell had 4 million subscribers, 91% above the 2.1 million of the prior year.

Prepaid subscribers increased 113% during the year, mainly due to the incorporation of Unefon users' base. During the same period, postpaid subscribers grew 45%. Postpaid subscribers are the most profitable and their churn is the lowest, making this growth especially relevant.

Three million clients -- 75% of the total -- are prepaid users, and one million -- 25% of Grupo Iusacell's clients base -- are postpaid. The company is focused on gradually increasing the postpaid subscriber's weight in the future.

Costs and Expenses

This quarter's costs were Ps.1,508 million, compared with Ps.1,232 million in the same period of 2006. The rise resulted mainly from an increase in handset subsidies -- primarily because of the expansion in the number of postpaid subscribers -- costs related to expansion activities and broadening the network's coverage and interconnection costs, as a consequence of the increase in voice traffic.

Operating expenses were Ps.668 million, compared with Ps.418 million in the fourth quarter last year. Growth is mainly due to more personnel expenses resulting from the increase in the company's size, as well as a boost in advertising expenses -- as a result of the launch of important campaigns during the Christmas season, and the promotion of new products and services.

EBITDA and Net Income

EBITDA for the quarter was Ps.818 million, a 71% rise compared with Ps.477 million in the same period last year. EBITDA margin in the quarter was 27%, compared with 22% a year ago.

In spite of the EBITDA increase, net income for the period decreased 67%, to Ps.346 million, from Ps.1,054 million a year ago.

The decrease in net income is the result of the net effect of; i) an extraordinary gain of Ps.901 million a year ago, due to the restructuring of the company's debt; ii) a Ps.243 million deterioration in the comprehensive financial cost, reflecting exchange gain reductions; iii) a Ps.117 million increase in depreciation and amortization for the incorporation of assets and concessions of Unefon; and iv) an improvement of Ps.187 million in the other income account for provision cancellation.


The accumulated Capex as of December 31, 2007 was US$102 million, mainly allocated to the acquisition of equipment and systems expansion of coverage and network capacity of the 3G Iusacell's network and EV-DO services. The investments position the company with a strong platform to offer innovative products, of superior added value, to the most profitable segments of the market.

Recent Events

The Mexican Government published last month, in its Daily Record (Diario Oficial), the Operating Specifications for Portability that will take effect on July 4, 2008. Portability will allow cellular or land-line phone users to keep their telephone number if they decide to change their cellular providers. Grupo Iusacell considers that portability represents an important opportunity for other companies' users -- especially postpaid subscribers -- to have access to our company's state of the art services and a wide range of multimedia applications. Grupo Iusacell has been preparing during recent years to make the most of portability by offering superior customer service, which together with unparalleled added value products, for data and multimedia, and more extended network coverage, will translate into superior options.

Twelve Month Results

Net revenue of 2007 grew 28%, to Ps.10,274 million, from Ps.8,042 million a year ago. Total cost and expenses were Ps.8,170 million compared with Ps.6,603 million in 2006. As a result, Grupo Iusacell reported EBITDA of Ps.2,104 million, 46% higher than the Ps.1,439 million the prior year. EBITDA margin of 2007 was 20%, two percentage points above the 18% registered in 2006. The company registered a net loss of Ps.1,285 million, compared with net income of Ps.4,032 million in 2006.

2006 2007 Change
Ps. %

Net Revenue Ps.8,042 Ps.10,274 Ps.2,232 28%

EBITDA Ps. 1,439 Ps. 2,104 Ps. 665 46%

Net Income Ps.4,032 Ps.(1,285) Ps. (5,317) -132%

Millions of pesos of constant purchasing power as of December 31, 2007.
EBITDA: Revenue less cost and operating expenses

About Iusacell

Grupo Iusacell, S.A.B. de C.V. (Iusacell, BMV: CEL) is a wireless cellular and PCS service provider in Mexico with a national footprint. Iusacell offers more and better voice communication and data services through state-of-the-art technology, such as its new 3G network, throughout all of the regions in which it operates. In addition to its core mobile telephony services, Iusacell also provides a wide range of other telecommunications services, including long distance, wireless local telephony and data transmission services. Grupo Iusacell is a Grupo Salinas's company ( For additional information please visit:

Grupo Iusacell, S.A.B. de C.V. quarterly reports and all other written materials may from time to time contain statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, the Company claims the protection of the corresponding laws.

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