América Móvil's U.S. MVNO, TracFone Wireless, plans to challenge T-Mobile US (NYSE:TMUS) and AT&T Mobility (NYSE: T) with its own Mexican roaming offer, though details on the forthcoming action are cloudy. América Móvil's CEO announced TracFone's plans during his company's quarterly conference call with investors.
Late last week América Móvil unveiled its new "Sin Fronteras" (No Borders) Plan. Under the plan, the carrier's postpaid Telcel subscribers in Mexico will be able to make calls from Mexico to the U.S. that will be charged as a local call, with no long distance charges. Further, while in the U.S., postpaid Telcel customers will be able to 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 this plan, which is priced at $3.15 (50 Mexican pesos) per month, including taxes.
During the carrier's quarterly conference call, Raymond James analyst Ric Prentiss asked whether "TracFone will be able to offer any similar type of products on the U.S. side?"
"Yes," responded América Móvil CEO Daniel Hajj, according to a Seeking Alpha transcript of the event. "We are going to do this in Mexico and shortly we are going to announce some programs in TracFone that will allow that people from TracFone will roam also in Mexico. So there is going to be new plans that we are going to announce in--maybe a couple of months."
América Móvil's "No Borders" offer comes just days after T-Mobile launched its own "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. T-Mobile recently said its MetroPCS prepaid customers will get those benefits while in Mexico: MetroPCS customers who add the "Mexico Unlimited" offering to their plan on or before August 31 will get it at for free through the end of 2015; after that, the service will cost $5 per month per line.
T-Mobile has said it partnered with the "No. 1 and No. 2 carriers in both Mexico and Canada" for its roaming agreements. América Móvil is the largest wireless operator in Mexico. Further, T-Mobile said that its roaming agreements are reciprocal, meaning that its partners can offer similar options--which appears to be what América Móvil's "No Borders" plan is based on.
However, it's interesting that the reciprocity appears to extend to América Móvil's U.S. MVNO, TracFone, which in some cases competes directly against T-Mobile (TracFone resells service from the biggest U.S. wireless network operators as an MVNO). TracFone, the nation's largest MVNO with 25.713 million subscribers, added just 25,000 net subscribers in the United States in the second quarter, only a slight improvement over the anemic growth the company experienced in the year-ago period. In the second quarter of 2014, the company had added just 8,000 customers.
TracFone has previously targeted the intersection of the United States and Mexico. For example, in 2012 it launched a new prepaid brand that aims to provide inexpensive calling to Mexico. The brand, Telcel America, launched with unlimited data, texting and calling, as well as unlimited calling to Mexico, for $60 per month.
AT&T kicked off the recent round of interest in roaming and Mexico with its $4.4 billion purchase of Mexican wireless operators Iusacell and Nextel Mexico earlier this year. AT&T last month 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."
TracFone adds 25K subs in Q2 as parent América Móvil unveils roaming-free service for U.S.
T-Mobile seeks to pre-empt AT&T's international expansion with free roaming to Mexico, Canada
TracFone's Telcel America to leverage América Móvil ties with cheap calling to Mexico