Claro El Salvador to invest over US$150mn in 2024 – Fitch

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América Móvil's subsidiary in El Salvador, CTE-Telecom, which operates under the Claro brand, is expected to invest US$152mn in 2024, according to Fitch.

The rating agency also forecasts revenue growth of around 4%, an Ebitda margin of 31% and operating cash flow of US$118mn.

This will allow the company to continue with capital investments without incurring debt with third parties, Fitch said in a report in which it affirmed CTE-Telecom's rating at ‘EAAA(slv)’ with a stable outlook.

The company has an 85% share of the fixed telephony market in El Salvador, 62% of residential internet, 59% of pay TV and 37% of mobile telephony.

Other operators do not provide market share data. Millicom, which operates as Tigo, claims to be number one in the mobile market and number two in the residential broadband and pay TV markets, according to data on its website as of the end of 2022.

Movistar (General International Telecom) and Digicel also compete in the mobile market.

According to Fitch, Claro saw a churn rate of 1.1% in August in El Salvador compared to an industry average of 1.7%.

In addition, the company has a strong credit profile relative to its peers, as it has no financial debt, has Ebitda margins double the average of its competitors and its revenues are higher than the average, Fitch said.

It recently renewed its spectral positions with maturities of between 2038 and 2041.

The rating agency expects Claro's revenues in El Salvador to grow by an average of 4.2% between 2024 and 2027, while the Ebitda margin should average 30.4% over the same period.

Capex is estimated at 26.2% of revenues on average between 2024 and 2027.

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