Is AT&T looking to sell its stake in Sky Mexico to Telefonica?

Spanish telecom Telefonica SA is interested in buying AT&T's pay-TV assets in Latin America, which could be valued in the range of $10 billion, Reuters reported over the weekend. The U.S. carrier acquired the businesses in several Latin American countries last year when it bought DirecTV, becoming the biggest player in Central and South America, but it has yet to decide what to do with the assets.

It isn't clear, however, whether AT&T is interested in selling the 42 percent stake in holds in Sky Mexico, a subscription TV service in Mexico and Central America, as Walter Piecyk of BTIG observed in a research note. AT&T is moving aggressively to capitalize on its acquisition of DirecTV, integrating its services to target each other's customers. The carrier has been expanding its wireless offerings in Mexico and may be inclined to employ the cross-promotion strategy in what it hopes is a very fertile new market. Article