October 20, 2015 / 3:55 PM / 2 years ago

UPDATE 2-Slim's America Movil faces multiple tests after surprise loss

(Recasts with share price move, analyst reaction)

By Christine Murray and Tomás Sarmiento

MEXICO CITY, Oct 20 (Reuters) - Mexico's America Movil faces tough challenges across all its biggest markets with weak Latin American currencies, tougher regulation and new competition contributing to its first quarterly loss in almost 14 years.

The region's biggest wireless and pay TV provider plans to cut capital expenditures and renegotiate with suppliers to help reduce currency exposure, top executives said on Tuesday. It also stepped up its rhetoric against regulations in Mexico.

Shares in the company, owned by the family of billionaire Carlos Slim, fell more than 2 percent in the wake of Monday's results.

A 45 billion peso ($2.7 billion) foreign exchange loss from tumbling Latin American currencies, tougher antitrust rules in Mexico and Colombia as well as recession in Brazil pushed America Movil to a surprise 2.884 billion peso loss in the third quarter.

Analysts had forecast in a Reuters poll that the company would post a 9.493 billion peso profit.

Chief Financial Officer Carlos Garcia Moreno said capital expenditures would be reviewed because the company was moving into a new phase after completing a five-year plan.

"I'm sure the capex in dollars (in 2016) is going to be less than what we had," CEO Daniel Hajj told analysts in a conference call. The company's planned 2015 capital expenditures were $10 billion, he said.

The company will push to move contracts with some suppliers into local currencies from dollars, Hajj added. This would help reduce exposure to currency volatility by paying costs with local revenue.

QUAD PLAY

When asked about future strategy, given the challenges, CEO Hajj said that a focus was "quad play," bundles offering mobile, fixed-line, Internet and TV.

The main hurdle to that is a ban on its offering television at home, placed on Slim's fixed-line Telmex business when Mexico's former state telecoms monopoly was privatized in 1990.

America Movil said on Tuesday its prospects of finally being granted a pay TV license by Mexican regulators were "high," and argued that the country needed more competition in the market, where Grupo Televisa holds more than 60 percent of subscribers.

America Movil's Mexico profit margin has fallen every quarter since a sweeping telecoms reform was completed last year, bringing tougher regulation.

The company said it has a good opportunity in March to renegotiate the tougher regulations placed on it as part of the sweeping reform, arguing that the rules meant it subsidized its competitors AT&T Inc and Telefonica SA.

In an interview with Reuters earlier this year, the head of regulator IFT, Gabriel Contreras, said America Movil was complying with many of the rules placed on it but that the body could step up measures if it was not satisfied in March.

Executives also said the company should be able to distribute shares of its Telesites tower spinoff next month, adding it was open to extending the model into the rest of Latin America but did not have plans to do so yet.

It also said it had no indication from Austria that the government wanted to sell its stake in Telekom Austria . (Additional reporting by Alexandra Alper and Anna Yukhananov; Editing by Simon Gardner and W Simon)

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