Telecom 2Q26 Preview Round-Up: Compelling Yields but Increasing Competition in Brazil, Market Repair Elsewhere in LatAm

Research evidence excerpt

Telecom 2Q26 Preview Round-Up: Compelling Yields but Increasing Competition in Brazil, Market Repair Elsewhere in LatAm

Global Research

20 July 2026ab

LatAm TMT Equities

Latin AmericaTelecom 2Q26 Preview Round-Up: Compelling

Yields but Increasing Competition in Brazil, Software

Market Repair Elsewhere in LatAm Leonardo Olmos,AnalystCFA

leonardo.olmos@ubs.com

+55-11-9658 7533

We remain more constructive on names outside Brazil, where competition Gustavo Farias

Associate Analystconcerns are slowly rising

gustavo.farias@ubs.com

For the 2Q26 earnings season in LatAm Telecom, our view - and where we +55-11-2767 6154

believe investors' focus is - differs meaningfully across geographies. In

Brazil, the key debate remains whether sizeable dividend yields (high-single /

low double digits) are sufficient to offset concerns on rising competition. We

believe this limits re-rating potential despite continued above-inflation MSR

growth and a modest but positive margin YoY EBITDA expansion for TEF-BZ,

TIM and AMX. Outside Brazil, stock performance is increasingly tied to

consolidation outcomes, integration execution and market repair, particularly

in Colombia and Argentina, which could unlock additional EBITDA margin and

FCF upside for AMX, TIGO and TEO. In Mexico, the key debate for TV remains

whether FTTH migration can improve its operating recovery and offset the

drag from elevated capex and M&A uncertainty.

Dividend considerations also differ across stocks. TIM and TEF-BZ remain

the sector's primary income names, while AMX offers a more balanced

combination of shareholder returns and FCF growth. For TIGO, deleveraging

and Colombia integration remain the main priorities, whereas TEO should be

viewed primarily as an earnings recovery and re-rating story rather than a