Carlos Aya Caro, 49, was appointed as the new CEO and President of Telefónica México, replacing Carlos Morales Paulín, who left the company after 17 years (during this period he held management positions in Mexico, Spain and Brazil).

The news took Morales Paulín by surprise, who was directly removed from the company. It is presumed that the decision did not have to do with leadership problems, but rather with the executive's difficulties in dealing with regulatory issues. 

The appointment is given in a framework of speculation about the possible sale of the Mexican subsidiary, as happened with the Central American divisions. It aims to boost market share, through an attractive offer of content, and improve the positioning of the operator in front of AT&T - which continues gaining participation in the mobile market - and the AEP (Preponderant Economic Agent), América Móvil. At the end of June, Telefónica had a 20.5% share in the segment, while AMX led with 63.3% and AT&T reached 15%.

Aya Caro, of Colombian origin, studied Industrial Engineering at the University of Los Andes (Bogotá) and has an MBA from the Columbia Business School (New York). The official has been part of the company since 2003. In 2006 he was appointed Director of Strategy, Regulation and Wholesale Business and in 2012, B2C Marketing Director of Telefónica Colombia. Through a statement, Telefónica highlighted the achievements of the executive in that last stage, such as the increase in mobile revenues, the commercial launch of 4G and the growth of broadband, TV and voice business of the operator in that country.

Outlook of Telefónica in Mexico

The operator's financial results for the second quarter of 2019 were negatively impacted by the acquisition of the 2.5 GHz band and the renewal of spectrum concessions in the 1.9 GHz band; as a result these commitments reduced the operational flow of the business in the country by 50%. It recorded total revenues of € 316 million, which translates into a 6.2% year-on-year increase. 

In Mexico, the operator already has 24.5 million mobile clients, of which 90% corresponds to the prepaid model. Hence, in the last quarter it registered the lowest ARPU in the market at US$ 2.5.

Given this scenario, Aya Caro will have to face the disadvantage of Telefónica in a market in which the AEP comfortably leads the mobile market, and with a client base that does not generate enough revenue to make its business model viable.