10. Property, Plant and Equipment, net

a) An analysis of property, plant and equipment, net at December 31, 2016, 2017 and 2018 is as follows:


	At December 31, 2015			Additions		Retirements			Business combinations		Translation effect of Foreign Subsidiaries		Depreciation for the year			At December 31, 2016
Cost
Network in operation and equipment	Ps.	641,384,702		Ps.	101,794,197	Ps.	(8,963,076	)	Ps.	1,873,445	Ps.	235,186,745	Ps.	—		Ps.	971,276,013
Land and buildings		54,794,386			2,900,511		(2,845,298	)		3,839		7,281,973		—			62,135,411
Other assets		106,468,602			24,368,918		(10,717,096	)		69,937		24,736,655		—			144,927,016
Construction in process and advances plant suppliers ⁽¹⁾		38,850,776			70,517,319		(70,911,593	)		11,255		11,252,127		—			49,719,884
Spare parts for operation of the network		20,342,389			34,010,751		(27,641,919	)		5,520		1,566,307		—			28,283,048

Total		861,840,855			233,591,696		(121,078,982	)		1,963,996		280,023,807		—			1,256,341,372

Accumulated depreciation
Network in operation and equipment		236,731,728			—		(1,968,376	)		—		153,147,349		107,976,385			495,887,086
Buildings		4,567,588			—		(975,284	)		—		3,709,952		3,179,066			10,481,322
Other assets		47,057,084			—		(25,099,710	)		—		10,396,438		16,105,885			48,459,697
Spare parts for operation of the network		(44,423	)		—		(54,280	)		—		20,896		401,008			323,201

Total	Ps.	288,311,977		Ps.	—	Ps.	(28,097,650	)	Ps.	—	Ps.	167,274,635	Ps.	127,662,344		Ps.	555,151,306

Net Cost	Ps.	573,528,878		Ps.	233,591,696	Ps.	(92,981,332	)	Ps.	1,963,996	Ps.	112,749,172	Ps.	(127,662,344	)	Ps.	701,190,066


	At December 31, 2016		Additions		Retirements			Business combinations		Effect of translation of foreign subsidiaries			Depreciation for the year			At December 31, 2017
Cost
Network in operation and equipment		Ps. 971,276,013		Ps. 78,272,882		Ps. (21,657,715	)	Ps.	599,306		Ps.(38,824,540	)		Ps. —			Ps. 989,665,946
Land and buildings		62,135,411		2,858,996		(415,219	)		27,686		(2,022,685	)		—			62,584,189
Other assets		144,927,016		19,287,525		(8,112,571	)		80,734		(5,866,897	)		—			150,315,807
Construction in process and advances plant suppliers ⁽¹⁾		49,719,884		66,383,381		(41,279,573	)		34,705		(737,023	)		—			74,121,374
Spare parts for operation of the network		28,283,048		27,013,148		(27,979,816	)		3,576		(728,358	)		—			26,591,598

Total		1,256,341,372		193,815,932		(99,444,894	)		746,007		(48,179,503	)		—			1,303,278,914

Accumulated depreciation
Network in operation and equipment		495,887,086		—		(21,214,724	)		—		(32,860,339	)		110,533,486			552,345,509
Buildings		10,481,322		—		(1,568,542	)		—		(940,054	)		2,682,559			10,655,285
Other assets		48,459,697		—		(4,572,509	)		—		(2,251,958	)		21,724,299			63,359,529
Spare parts for operation of the network		323,201		—		(9,205	)		—		(4,339	)		265,736			575,393

Total		Ps. 555,151,306		Ps. —		Ps. (27,364,980	)	Ps.	—		Ps.(36,056,690	)		Ps. 135,206,080			Ps. 626,935,716

Net Cost		Ps. 701,190,066		Ps. 193,815,932		Ps. (72,079,914	)	Ps.	746,007		Ps. (12,122,813	)		Ps. (135,206,080	)		Ps. 676,343,198

At December 31,
2017

Additions

Retirements

Business
combinations

Effect of
translation of
foreign
subsidiaries and
hyperinflation
adjustment

Depreciation
for
the year

At December 31,
2018

Cost

Network in operation and equipment

Ps. 989,665,946

Ps. 68,900,443

Ps. (1,610,246

)

Ps. 128,246

Ps. (87,888,453

)

—

Ps. 969,195,936

Land and buildings

62,584,189

4,429,433

(3,987,671

)

8,874

(5,904,499

)

—

57,130,326

Other assets

150,315,807

25,268,252

(13,377,798

)

2,578

(12,399,702

)

—

149,809,137

Construction in process and advances plant suppliers ⁽¹⁾

74,121,374

92,285,397

(76,978,798

)

1,379

(8,336,823

)

—

81,092,529

Spare parts for operation of the network

26,591,598

49,380,349

(44,626,488

)

1,939

(2,902,869

)

—

28,444,529

Total

1,303,278,914

240,263,874

(140,581,001

)

143,016

(117,432,346

)

—

1,285,672,457

Accumulated depreciation

Network in operation and equipment

552,345,509

—

(28,712,096

)

—

(67,907,227

)

104,279,361

560,005,547

Buildings

10,655,285

—

(2,311,442

)

—

(2,157,996

)

2,625,102

8,810,949

Other assets

63,359,529

—

(2,418,837

)

—

(6,579,983

)

22,172,785

76,533,494

Spare parts for operation of the network

575,393

—

(160,696

)

—

(131,429

)

38,479

321,747

Total

Ps. 626,935,716

Ps. —

Ps. (33,603,071

)

Ps. —

Ps. (76,776,635

)

Ps. 129,115,727

Ps. 645,671,737

Net Cost

Ps. 676,343,198

Ps.240,263,874

Ps. (106,977,930

)

Ps. 143,016

Ps. (40,655,711

)

Ps. (129,115,727

)

Ps. 640,000,720

⁽¹⁾	Construction in progress includes fixed and mobile network facilities as well as satellite developments and fiber optic which is in the process of being installed.

The completion period of construction in progress is variable and depends upon the type of plant and equipment under construction.

b) At December 31, 2017 and 2018, property, plant and equipment include the following assets under capital leases:


	2017			2018
Assets under capital leases		Ps. 8,116,532			Ps.7,770,681
Accumulated depreciation		(3,475,014	)		(3,530,241	)

		Ps. 4,641,518			Ps. 4,240,440

c) At December 31, 2018 and 2017, Claro Brasil has land and buildings and other equipment that are pledged in guarantee of legal proceedings in the amount of Ps.3,166,882 and Ps. 3,521,082, respectively.

d) Relevant information related to the computation of the capitalized borrowing costs is as follows:

Year ended December 31,

2016

2017

2018

Amount invested in the acquisition of qualifying assets

Ps. 52,974,400

Ps. 49,642,370

Ps. 45,456,630

Capitalized interest

2,861,307

2,875,034

2,020,288

Capitalization rate

5.4%

5.8%

4.4%

Capitalized interest is being amortized over a period of estimated useful life of the related assets.

e) On October 20, 2017, our subsidiary Star One signed a contract with SSL — Space Systems Loral for construction of the Star One D2 satellite, which will be equipped with transponders 52 in the C and Ku bands, 20 Gbps of capacity in Band Ka and a certain capacity in X-band. The cost of this Project is estimated to be approximately Ps. 6,391,104 (US$ 323,000) and the launch will take place at the end of 2019. At December 31, 2018 and 2017 the amount recorded in Construction in progress amounts to Ps. 2,896,399 (R$551,528) and Ps. 916,240 (R$153,179), respectively.