America Movil was awarded a license to operate PCS services in Nicaragua. The license cost seven million dollars.

With more than one million net subscriber gains in the third quarter, the number of America Movil's wireless subscribers reached 29.9 million at the end of September; substantially all of them (29 million) were equity subscribers. The latter increased by almost 2.3 million in the period, reflecting the greater interest that America Movil now has in Telecom Americas.

Telcel's subscriber base rose by 587 thousand in the quarter, to 19.4 million, a gain of almost 30% over 12 months. Net subscriber additions this quarter were lower due to seasonal factors and a relatively weak economy.

Continuing with its positive trend, Conecel in Ecuador has shown the best subscriber growth in relative terms among America Movil's wireless companies. With 773 thousand subscribers, Conecel's subscriber base has grown 18% this quarter and 92% on an annual basis, with net gains of 120 thousand in the quarter. Comcel, the Colombian subsidiary, reached 2.6 million customers in September, having obtained 212 thousand net subscriber additions in the third quarter; year over year, its subscriber base has grown just over 60%. Sercom, in Guatemala, also showed great dynamism in the third quarter: its net subscriber additions, 52 thousand, were more than 30% higher than in the previous quarter, and brought its subscriber base to 552 thousand clients. On an annual basis, Sercom's subscribers have grown by 55%.

America Movil's Brazilian subsidiary, Telecom Americas, registered a 57 thousand increase in subscribers in the period, to 4.8 million. This marks a deceleration in the rate of subscriber growth, mainly caused by the economic and political uncertainty surrounding Brazil-which has resulted in a noticeable slowdown in economic activity-and by a more competitive environment in the region.

At the end of September, Telgua had 771 thousand fixed wirelines in addition to the wireless subscribers of its subsidiary Sercom.

America Movil's revenues surpassed 15 billion pesos in the third quarter, reflecting among other things the consolidation of Telecom Americas' results in America Movil's beginning in July. In the nine months to September, revenues totaled over 40 billion pesos, up 27.9% over the previous year. Excluding Telecom Americas, America Movil's revenues (13.9 billion pesos) were up 5.6% in the quarter and 23.0% on the year to date accumulated.

The expansion of revenues was broadly based: practically all the operations registered significant quarter-on-quarter increases in service revenues.

At 37.4% of revenues, EBITDA had a strong showing in the quarter: 5.8 billion pesos, over 60% higher than the previous year's. Operating profits stood at 3.1 billion pesos, nearly 30% more than a year before. All the operations showed an important improvement in their EBITDA margins relative to the previous quarter: noteworthy among them was Telecom Americas, whose EBITDA margin shot up from 27.8 to 36.4%.

A net profit of 256 million pesos was obtained in the quarter once financial costs and taxes are taken into account, bringing the year's total to nearly 2.0 billion pesos, almost 3 times greater than the one observed a year before. Net interest expenses amounted to 742 million pesos in the first nine months. The foreign exchange losses incurred in the third quarter reflect the devaluation of most Latin American currencies, including the Mexican peso, relative to the U.S. dollar.

In all, America Movil generated a free cash flow of 2.8 billion pesos in the quarter, after capital expenditures that have proceeded as planned in the budget. The cash flow was directed towards the reduction of its debt and the purchase of shares.

The net debt position of America Movil increased to 38.6 billion pesos, reflecting the consolidation of Telecom America's debt and the new amounts owed to Bell Canada International on account of the purchase of its interest in Telecom Americas. However, as can be seen in the table below, there has been a considerable reduction in the aggregate debts of America Movil and Telecom Americas, from a total of 5.7 billion dollars-equivalent at the end of 2001 to 4.3 billion dollars at the close of September. Furthermore, the term structure of such debt has been visibly improved, with the proportion of short term debt falling from 41.3% to 19.7% in the period.

The consolidation of Telecom Americas brought about some significant changes in the balance sheet of America Movil, increasing the value of plant and equipment by 6.4 billion pesos, that of goodwill by 1.5 billion pesos and the one of licenses by 9.4 billion pesos and reducing that of investments in affiliates by 18.6 billion pesos. A reduction in equity in the amount of 12.8 billion pesos came about as a result of: 1) a translation effect, given that Telecom Americas' investments in Brazil are denominated in dollars but the operating companies' assets are denominated in reais; and 2) the incorporation of accumulated losses that Telecom Americas carried on its books and which had not been reflected before in America Movil's balance sheet, since Telecom Americas' results were incorporated in America Movil's through the equity method.

Telcel's revenues in the third quarter, 10.3 billion pesos, were up nearly 6% sequentially, with service revenues rising 5.0%. For the first nine months of the year, Telcel's revenues totaled almost 30 billion pesos, 19.2% more than a year before. ARPUs continued their upward trend, increasing by 2.0% and 0.9% in the case of prepaid and contract subscribers respectively.

EBITDA rose 8.6% quarter over quarter (after adjusting for the release of the first quarter tax-related reserve) and 29.0% annually, to just over 4 billion pesos, bringing the year-to-date figure to 11.2 billion pesos. Telcel's EBITDA margin hit 39.3% in the quarter-nearly three percentage points more than a year before-and 38.4% in the nine months to September.

The increase in the EBITDA margin reflects both the steady increase in revenues and the containment of costs and expenses, and took place in spite of an increase in the churn rate. The quarter's churn rate reflects a certain spillover of subscriber disconnections from the second quarter into the third quarter, resulting in a lower than expected churn rate in the second quarter but a higher one in the third quarter, which to some extent is a consequence of the relatively weak economic activity in Mexico.

On a quarterly basis, the operating profit increased by 7%, to 3 billion pesos (also adjusting for the reserve that was released in the previous quarter) or 29.6% of revenues. Through September, Telcel had generated an operating profit of 8.5 billion pesos, equivalent to 29.1% of revenues and 23.4% higher than the one registered a year before.

On October 1st, Telcel officially launched its GSM services in Mexico, covering the countries' 56 main cities. The company expects its GSM coverage to extend, towards the end of the year, to a total of 67 cities.

The range of services offered with this new technology will be available for both prepaid and postpaid subscribers, including national and worldwide roaming services (which will ultimately be available in those countries where there is GSM coverage) and a number of data- based services, including GPRS.

Rapid subscriber growth in the wireless sector, as the number of subscribers increased by 52 thousand in the third quarter, helped bring about an increase of 4% in service revenues and 3% in total revenues, to 109 and 113 million dollars, respectively, on a secuential basis. Through September Telgua's revenues totaled 334 million dollars.

In spite of the increase in revenues, both EBITDA and operating profits were roughly flat on the quarter, partly as a result of the rapid subscriber growth and its impact on acquisition costs. Year-to-date, Telgua has generated 186 million dollars in EBITDA (55.6% of revenues) and 103 million dollars in operating profits (a 30.9% margin).

As of the end of September, Comcel's subscriber base had grown by 60.7% year-on-year and by 9% relative to the preceding quarter, surpassing the 2.5 million subscriber mark.

Service revenues were up by 14.2% relative to the previous quarter and 74.6% annually, to 253 billion Colombian pesos, as the levels of traffic increased alongside the number of subscribers and the company promoted new plans and services, including various data-based services. Postpaid and prepaid ARPUs rose by 4.8% and 15.1% in the quarter. Revenues totaled 268 billion Colombian pesos in the third quarter and 723 billion Colombian pesos in the first nine months of the year, the year-to-date figure being nearly 60% higher than in the same period of 2001.

Lower subscriber growth in the quarter and effective cost control policies have led to a reduction in SG&A expenses (-9.2%) and a less rapid increase of total costs relative to that of revenues. As a result, the EBITDA margin rose by 2.2 percentage points in the quarter, to 33.1%. EBITDA added up to 89 billion Colombian pesos in the quarter and 226 billion Colombian pesos through September, the latter more than doubling that registered during the same period of 2001.

The operating profit stood at 27 billion Colombian pesos in the third quarter, rising by 62% relative to the previous one; a year before the operations were just breaking even. Accumulated operating profits to September reached 53 billion Colombian pesos; in 2001 there was a loss of 41 billion Colombian pesos over the same interval.

As of the end of September, America Movil's Ecuadorian company reached 773 thousand subscribers, displaying the best subscriber growth rate among America Movil's subsidiaries: 18.4% sequentially and 92.4% year-on-year.

The rapid subscriber growth has been accompanied by important revenue increases: at 32 million dollars in the quarter, total revenues were up 9.6% sequentially and 62.1% on an annual basis. In the nine months to September, Conecel's revenues were 88 million dollars, 59% higher than those registered the previous year.

Cost control policies are still bringing forth good results, as total costs rose less rapidly than revenues, by 5.0% in the quarter and 51.2% annually, leading to sharp increases in EBITDA: 19.1% quarter-on-quarter (to 12 million dollars) and 86.3% over twelve months. In spite of being the most dynamic company in terms of subscriber growth, Conecel's EBITDA margin stands at around 35%, in both the third quarter and the first nine months of the year.

With an operating profit of 5 million dollars in the period, the year-to-date figure went up to 10 million dollars, which stands in contrast with the net loss observed during the first three quarters of 2001 and goes to show the marked improvement in the results of the Ecuadorian operations.

At the end of September Tracfone's subscriber base totaled 1.8 million, slightly down in the quarter. However, its churn rate continued to come down, from 5.9% to 5.5%. Tracfone has been migrating its subscriber base to digital phones (both TDMA and CDMA) and 30.5% are already digital, up from 20.3% in June.

Total revenues, at 106 million dollars, were also slightly lower (3%) than those registered in the preceding quarter. Year to date revenues stood at 323 million dollars, 2% lower than those of the prior year.