AT&T (NYSE: T) is starting to rebrand its Mexican wireless operations under its own name, and its top Mexican executive acknowledged that, while it is starting to shake up the market it still faces a formidable rival in América Móvil, the dominant Mexican carrier.
Earlier this year, AT&T closed its acquisitions of Mexican wireless operators Iusacell and Nextel Mexico for a total of $4.4 billion. AT&T Mexico CEO Thaddeus Arroyo said at a news conference that the company launched several new plans in Mexico under the AT&T brand and will begin renaming Iusacell and Nextel stores by the end of the year. That process will continue through the end of 2016, Arroyo said, according to the Wall Street Journal.
AT&T in June promised to spend $3 billion during the next four years to cover 100 million people in Mexico with LTE by the end of 2018. AT&T has said it is creating the "first-ever North American Mobile Service Area covering 400 million people and businesses in Mexico and the U.S."
Arroyo noted that one of AT&T's first moves after it took control of the carriers was to let Mexican customers use their individual plans for voice, texting and data while in the U.S. at no added charge, and to call friends and family in the U.S. who are on AT&T's network at for free.
Arroyo said AT&T spurred similar offerings from other carriers. "Many of the plans you're seeing now, when did they arrive? They arrived when we came to bring more competition," he said.
In early July, T-Mobile US (NYSE:TMUS) had launched its "Mobile without Borders" offer, under which T-Mobile lets customers make calls, texts and use data as they do in the U.S. when they travel to Mexico and Canada.
About a week later América Móvil announced its "Sin Fronteras" Plan ("No Borders Plan"). Under the plan, its postpaid Telcel subscribers in Mexico can make calls from Mexico to the U.S. that are charged as a local call, with no long distance charges. Further, while in the U.S., postpaid Telcel customers can use the minutes, SMS and data under their plans as if they were in Mexico, with no roaming charges. All postpaid subscribers are eligible to get the plan, which is priced at $2.94 (50 Mexican pesos) per month, including taxes.
Earlier this month América Móvil removed roaming charges on calls to and data in the United States for 40 million Mexican prepaid customers on its "Amigo Optimo" and "Optimo Plus" plans. Calls made to the U.S. will be charged local rates as will data usage.
Meanwhile, Sprint (NYSE: S) earlier this month unveiled its new "Open World" international roaming service that makes unlimited calling and texting to Canada, Mexico and other Latin American countries free for its U.S.-based customers. The offering also gives Sprint customers free calls and texts and 1 GB of high-speed data when they are traveling in those countries.
According to the WSJ, Arroyo defended the Mexican regulations that have produced more competition for América Móvil, which he noted is still the main player in Mexico. "Things haven't changed a lot. We are here to change it," he said. "We have less than 9 percent of the market. Sixty-eight percent of the market is still totally in one company. So the asymmetric rules are necessary."
AT&T plans to turn the Nextel and Iusacell brands into premium AT&T brands but keep the Unefon brand, which was part of Iusacell, for low-end prepaid customers, according to the Journal.
Following AT&T's announcement on investment in Mexico, América Móvil said it plans to spend $6 billion in the next three years to improve its mobile and fixed networks in the country.
After cleaning up its customer base in Mexico, AT&T now has 8 million subscribers south of the border, Arroyo said, though he declined to provide estimates for subscriber growth. América Móvil had 72.6 million wireless subscribers at the end of the second quarter, and Spain's Telefónica had 23 million, up 14 percent year-over-year.
- see this WSJ article (sub. req.)
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