Intro

My guest on the show today is Mauricio Ramos, the CEO of Millicom. Millicom is a 3.75 billion dollar market cap mobile and broadband company that primarily operates in Latin and South America. What is most interesting about Millicom is its leading positions in its largest markets and how rapidly the company is transforming itself into a broadband leader in the region.

Mauricio has been CEO since 2015 but has been involved with the industry since the late 1990s. Over his tenure, he has overseen the company’s ongoing exit from its African operations as well as its expansion through M&A into new markets such as Panama. Mauricio spent a number of years working for Liberty Global and has brought the John Malone cable playbook to Millicom.

COVID has presented the company with some unique challenges and I thought it would be a great time to catch up with Mauricio about his outlook for Millicom and the markets the company operates within.

In this conversation, we had the opportunity to cover:

- The rationale for spending aggressively to become a more broadband-focused company

- What he learned about cable industry while working for Liberty Global

- The process of working to become better known by US investors

- The benefits of owning cable and wireless assets in their markets

- How to establish a cohesive culture across borders

Key Takeaways:

- The biggest learnings from Liberty Media’s John Malone: business focus and clarity are what drive success so you must eliminate distractions.

- How to create moat in cable and broadband: benefit from a first mover advantage where possible, build a committed customer base that is driven by great customer service, offer multiple products that allow you to sell a low priced bundle and consistently reinvest in your brand

- Developing cultural traditions within an organization can build incredible employee buy-in across all levels of an organization.

- Turning your employees into long-term investors through compensation drives organizational buy-in for long-term strategic decisions.

This episode of Compounders: The Anatomy of a Multibagger is sponsored by Tegus, an innovative and disruptive company that is changing the way professional investors work. For more information, please visit: https://www.tegus.co/

Timestamps for this episode:

1:19 - Introduction

2:55 - What happens when your largest investor exits its position

6:52 - The flexibility and autonomy afforded when a controlling shareholder departs

9:12 - Millicom’s unique structure that comes from trading on two exchanges

10:32 - How an investor can get comfortable investing in Latin America

16:07 - What Mauricio learned from John Malone and Liberty Global

21:16 - Fixed mobile conversion as a value generator

24:39 - What is Millicom’s moat?

29:04 - Customer service culture as a moat

31:52 - Creating a consistent culture across varied geographies

37:24 - The benefits of Millicom’s scale in Latin American

41:04 - How Millicom creates win-win relationships with governments and regulators throughout Latin America

46:18 - The perception of cable and mobile businesses and the disparate multiples they trade at

51:00 - Millicom’s capital allocation strategy

53:45 - How strategy can vary depending on market position within a country

56:55 - How to align the organization behind long-term goals even if there are short-term challenges

59:22 - Mauricio’s biggest learnings from his years as CEO

1:01:50 - What is the most misunderstood part of Millicom?

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All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable.