Thaddeus Arroyo, the chief executive of AT&T’s operations in Mexico, said he remains confident the Mexican government’s telecom regulator will enact reforms that will reduce America Movil’s market share in the country.
“Unlike past efforts, the IFT [Federal Telecommunications Institute, Mexico’s independent government agency overseeing the country’s telecom regulations] has a historic opportunity to ensure the reforms have a lasting effect,” Arroyo told Mobile World Live. “There is no doubt IFT has the necessary tools and leadership to do this and we are confident that the IFT will take appropriate measures to ensure that the goals of the 2013 reforms are attained.”
Added Arroyo: “With the true success of these reforms, Mexican consumers and businesses will benefit and the country as a whole will enjoy economic growth. Ultimately, Mexico will send a clear signal to future investors that its growth trajectory and investment potential is sustainable.”
However, MWL pointed out that the IFT still hasn’t enacted the reforms it promised in 2013. The regulator said it would impose penalties against America Movil if it did not reduce its market share below 50 percent – MWL noted the company still commands a 68 percent market share, far ahead of AT&T’s 8.1 percent and Telefonica’s 23 percent.
“The potential of the 2013 reforms made Mexico a very attractive place to invest, as it sought to level the playing field in an industry with a single player holding a dominant concentration of the market,” Arroyo told MWL. “We would not have invested in Mexico without these regulatory reforms and the creation of IFT as an independent entity with the autonomy, power and tools to ultimately reinforce these reforms.”
Despite the regulatory cloud hanging over AT&T’s efforts in Mexico, the company continues to boast of successes across the border. In the company’s second quarter earnings conference call with analysts, AT&T CFO John Stephens said the company continues “to make significant progress in building our customer base and deploying our 4G LTE network. We added 742,000 wireless subscribers in the second quarter as we near the 10 million subscriber mark in the country,” according to a Seeking Alpha transcript of his remarks.
He added that AT&T now serves 65 million people in Mexico with LTE, and that the company has launched the AT&T brand in 61 cities in Mexico, including Mexico City.
AT&T spent $4.4 billion last year to acquire operators Iusacell and Nextel Mexico. The second-largest U.S. operator also vowed to spend $3 billion to cover 100 million people in Mexico with LTE by the end of 2018.
More recently, AT&T paid $57 million for spectrum in Mexico's auction of airwaves, but the carrier was far outspent by the country's dominant wireless carrier, America Movil.
- see this MWL article