Sunday, November 9, 2014

AT&T Bets on Mexico with Acquisition of Iusacell

AT&T agreed to acquire Iusacell, a leading Mexican mobile operator, from Grupo Salinas for US$2.5 billion, inclusive of Iusacell debt. The deal includes all of Iusacell’s wireless properties, including licenses, network assets, retail stores and approximately 8.6 million subscribers. The acquisition will occur after Grupo Salinas, the current owner of 50 percent of Iusacell, closes its announced purchase of the other 50 percent of Iusacell that Grupo Salinas does not own today.


Iusacell offers wireless service under both the Iusacell and Unefón brand names with a network that today covers about 70 percent of Mexico’s approximately 120 million people. AT&T plans to expand Iusacell’s network to cover millions of additional consumers and businesses in Mexico.

Iusacell operates a 3G  GSM/UMTS network based on the same technology that AT&T uses in the United States. Iusacell owns between 20 and 25 MHz of 800 MHz spectrum, primarily in the southern half of the country, including Mexico City and Guadalajara, and an average of 39MHz of PCS spectrum nationwide. Iusacell’s Total Play business, including the network assets to support pay TV and wireline broadband services will be spun out to Grupo Salinas’ existing shareholders prior to AT&T closing its acquisition of Iusacell.

AT&T cited recent changes to government policies in Mexico that have created a friendly climate for foreign investment.  AT&T plans to create a North American Mobile Service area for U.S. customers calling or visiting Mexico, and Mexican customers calling or visiting the United States.

“Our acquisition of Iusacell is a direct result of the reforms put in place by President Peña Nieto to encourage more competition and more investment in Mexico. Those reforms together with the country’s strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest,” said Randall Stephenson, AT&T chairman and CEO. “Iusacell gives us a unique opportunity to create the first-ever North American Mobile Service area covering over 400 million consumers and businesses in Mexico and the United States. It won’t matter which country you’re in or which country you’re calling – it will all be one network, one customer experience.

“Mexico is still in the early stages of mobile Internet capabilities and adoption, but customer demand for it is growing rapidly,” Stephenson said. “This is an opportunity for us to provide Iusacell the financial resources, scale and expertise to accelerate the roll-out of world-class mobile Internet speeds and quality in Mexico, like we have in the United States.”

Iusacell will continue to be headquartered in Mexico City following the transaction closing.

The transaction is subject to review by Mexico’s telecom regulator IFT (Instituto Federal de Telecomunicaciones) and Mexico’s National Foreign Investments Commission.

http://about.att.com/story/att_to_acquire_mexico_wireless_provider_iusacell.html

In 2011, AT&T sold its 49% stake in Mexico's Alestra, giving ALFA 100% control of the firm. Financial terms were not disclosed. Alestra offers a range of business-class services, including converged communications, hosting and cloud capabilities. The company operates a 40 Gbps fiber network spanning 6,700 kms. across Mexico, including 1,750 kms of metro rings.

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