TIGO Stock Forecast & Price Target

Millicom International Cellular is strategically expanding its footprint in the Latin American telecommunications market through the acquisition of Telefonica's operations in Ecuador and Uruguay, which could enhance scale and customer base. The firm's wireless networks serve approximately 120 million people and 42 million customers, supplemented by fixed-line networks reaching 14 million homes and 4 million broadband customers, reflecting a solid infrastructure foundation for converged service offerings. Despite the anticipated 74% increase in net debt due to these acquisitions, Millicom is expected to implement a turnaround strategy that could offset the heavy interest burden and drive future growth.

Millicom International Cellular faces significant challenges due to a low capex-to-sales ratio of 12.2% in 2024, which may hinder its ability to invest adequately in infrastructure and competitive upgrades. The entry of new competitors, such as Nubicom SRL deploying a 5G network in Argentina, is expected to exert pressure on average revenue per user (ARPU) and overall profit margins, complicating the company's financial performance. Additionally, the low capital expenditure relative to sales raises concerns about the firm's long-term sustainability and growth in a competitive telecom market.