AT&T (NYSE: T) is aiming to rent space on cell towers in Mexico from Telesites, the company that was spun off this spring from América Móvil, according to a Bloomberg report.
The report, citing unnamed sources familiar with the matter, notes that the rental agreement would give AT&T access to a widespread network in Mexico with around 10,800 towers.
"Our priority is to begin work to expand our network and enhance our mobile Internet offering," AT&T spokesman Fletcher Cook told FierceWireless in a statement. "As we assess our options, we expect fair pricing, an expedited process, and efficient access similar to other tower companies."
América Móvil declined to comment, the report added.
AT&T is looking to expand its Mexican wireless networks over the next year and a half, and Telesites could be a solid vehicle for doing so. AT&T CEO Randall Stephenson said in May it will likely be around 18 months before the carrier can deliver a truly strong LTE data experience beyond urban areas in Mexico. Stephenson has said he is confident AT&T can ride the wave of mobile data growth that the carrier expects from Mexico's burgeoning middle class.
Speaking at an investor conference, Stephenson said it "will take 18 months before you have a really good, robust LTE experience" with "broad, ubiquitous coverage" in Mexico. He said AT&T will move quickly to deploy LTE in urban areas and on highways, but in more rural areas and popular vacation spots it will take some time.
AT&T closed its $1.88 billion deal for Nextel Mexico at the end of April, a few months after it closed a $2.5 billion deal to purchase Mexican wireless carrier Iusacell. AT&T's goal is to create one seamless LTE and calling network between the U.S. and Mexico covering more than 400 million POPs.
In April América Móvil shareholders approved the plan to create Telesites. The new firm will lease space on towers it controls to competitors of América Móvil, as most of the towers can support equipment from multiple carriers. However, initially the towers are only hosting América Móvil's own wireless unit Telcel, which is the dominant mobile operator in Mexico with 71 million subscribers and around 70 percent market share.
The spinoff came amid pressure from Mexican regulators for billionaire Carlos Slim, who controls América Móvil, to sell off assets owned by the company. Telesites faces the same regulations that apply to América Móvil in terms of access and infrastructure sharing, and regulators can set rates Telesites charges to carriers if the firm cannot reach deals with operators.
According to Bloomberg, the Mexican government estimates it needs about 80,000 cell sites to handle growing demands for network capacity, up to four times from the current site count in the country today.
At the end of June 2014, AT&T sold its 8.27 percent stake in América Móvil for $5.57 billion to shareholders Inmobiliaria Carso and Control Empresarial de Capitales. AT&T sold the stake as part of the regulatory approval process related to its $48.5 billion acquisition of DirecTV (NASDAQ: DTV), which is still being evaluated by U.S. regulators.
- see this Bloomberg article
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