UNE-EPM Posts Modest Full-Year 2019 Profit, Reversing Losses in 2018

Medellin-based nationwide telecom/internet/cable-TV giant UNE-EPM revealed March 31 that its full-year 2019 after-tax profits rose to a relatively modest COP$519 million (US$128,000) — up from a substantial COP$65 billion (US$16 million) net loss in 2018.

The profits improvement is explained mainly by the sale of cell-phone towers along with more favorable results from affiliate Colombia Móvil, which operates under the “Tigo” trade name, according to UNE-EPM.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also improved in 2019, to COP$1.6 trillion (US$394 million), versus COP$1.4 trillion (US$345 million) in 2018.

Revenues in 2019 climbed to COP$4.9 trillion (US$1.2 billion), up from COP$4.8 billion (US$1.1 billion) in 2018.

Highlights of 2019 included Colombia Movil winning a 10-MHz spectrum-use permit for a 10-year term, as well as potential gains from another spectrum auction in December. “Obtaining 40-MHz in the 700-MHz band will expand coverage to thousands of users and improve mobile data service,” according to the company.

The Colombia Móvil division saw revenues rise 4.2% year-on-year, to COP$2.24 trillion (US$552 million), while the division’s EBITDA hit COP$655 billion (US$161 million) and profits rose to COP$27 billion (US$6.6 million), according to the company.

Meanwhile, the Edatel subsidiary (telecom in rural areas) saw revenues rise to COP$210 billion (US$51.7 million), with EBITDA at $82 billion (US$20 million) and profits of COP$19 billion (US$4.6 million).

The “OSI” and “CTC” subsidiaries meanwhile generated EBITDA of COP$10 billion (US$2.4 million) and profits of COP$4 billion (US$986,000), according to the company.

Fiber-optic broadband coverage — enabling 50-megabytes per second connections — grew by almost 6%, “allowing us to reach more homes with internet, broadband, television and telephone services on this technology,” according to the company.

As a result, “in 2019 our subscriber base grew close to 7% on the internet, 6% on digital television and 2% on landlines; achieving an increase higher than 3% in new clients,” according to the company.

Mobile/Cell-Phone Business

“The prepaid [cell-phone service] market had little change in supply, where we continue to be competitive incorporating unlimited voice to all operators,” according to UNE-EPM.

“Prepaid had revenue growth of more than 1% versus 2018, leveraged mainly due to increased package sales. Additionally, the 4G prepaid user base LTE increased 42% versus 2018, both by new users and by penetration of existing users at the base.

“In postpaid we continue with our plans based on simplicity, which consist of three plans with unlimited minutes and messages and data to always be connected [and] where included, accessories to improve the user experience such as music, equipment insurance and preferential service.

“In addition, we make alliances with main banks in the country to offer cell-phone financing at a 0% interest rate. Also, we continue with differential offers on phones such as ‘2×1,’ so that our customers can access the latest generation phones in 4G.

“Thanks to this, in 2019 our base of customers increased by about 10% and the empowerment of more LTE sites supported the increase in our postpaid mobile data users by more than 18%,” according to the company.