Millicom’s balance sheet optimization enables high-value acquisitions in LATAM

Millicom's (MIC) Q2 2025 confirmed two clear trends that have been visible since Atlas took control: an investment fund linked to Xavier Niel, owner of Iliad. First, the company continued its acquisition spree, taking over Telefónica´s operations in Ecuador and Uruguay during the quarter. If all MIC's current bids receive approval, it will become the second-largest telecommunications holding company in the region by number of markets covered (11) and rank third in terms of revenue. Another notable development for the “new” Millicom was the rise in EBITDA margin, which reached 46.7% of revenue in Q2; a level of profitability not seen since 2010. In Q2 2025, MIC reported revenues of $ 1.372 billion, representing a 5.8% decline from the previous year. Revenues have declined steadily each quarter since Q2 2024 due to currency devaluations in the countries where it operates, particularly in Bolivia during 2025. However, revenue by service type reveals that while mobile services remained stable, fixed services declined. The customer base grew, but with low ARPU. Although performance varies by country, a common characteristic of Millicom's fixed operations is the slow migration to fiber (FTTH), which undermines its competitive situation. According to Dataxis, as of Q2 2025, just 9.4% of Milicom's accesses were fiber-based; a very low figure given that 68.5% of connections in the region were already FTTH, the fastest-growing option. Austerity is part of the “new” Millicom. Since 2023, CAPEX as a percentage of revenue has been steadily declining. In Q2, CAPEX represented 11.3% of revenue, roughly the same level as the 2024 average. This investment could explain MIC's slow fiber rollout and limited development of video options on OTT.  MIC's debt profile has improved significantly in recent years, and it is a key factor enabling its acquisition-led growth. The company’s net debt to EBITDA ratio (net leverage) fell sharply from x4.5 in 2021 to x2.18 in Q2 2025. Millicom currently has three bids underway—Colombia, Ecuador, and Uruguay—for $ 1.82 billion. Rating agency Fitch believes Millicom can absorb these investments thanks to its high EBITDA margins and rising revenues related to these acquisitions, which would bring its net leverage ratio to x2.5.