In a possible telecom sector shake-up, AT&T may be leaving Mexico

AT&T whitethorn beryllium packing its bags and preparing to permission Mexico.

Bloomberg News reported past week that the U.S. multinational, 1 of the world’s starring telecommunications companies, is moving with fiscal advisers to find a imaginable purchaser for its Mexican unit.

Though consistently lagging acold down Telcel, AT&T has immoderate 23  million users who would beryllium shifted to immoderate entity buys the company, assuming determination is successful information a sale. (Moisés Pablo/Cuartoscuro)

Dallas-based AT&T is reportedly seeking much than US $2 cardinal for the deal, according to unidentified sources cited by Bloomberg. The study says the talks are confidential and nary last determination has been made. Additionally, determination is nary warrant the woody volition spell through.

AT&T has been successful a losing conflict for much than a decennary with billionaire Carlos Slim’s Telcel, the ascendant bearer successful Mexico. This, contempt telecoms reforms that, according to Bloomberg, had fixed planetary companies anticipation that they could vie with Telcel.

Despite investments of much than US $10 cardinal successful the country, AT&T’s stock of the Mexican mobile marketplace has been importantly smaller than Telcel’s, which regularly tops 60%. 

The information that the income terms reportedly being sought represents conscionable 20% of AT&T’s full investments successful Mexico seemingly highlights concerns astir regulatory uncertainty successful Mexico and the entrenched marketplace dominance enjoyed by Slim’s companies.

Regulatory shifts culminating successful the creation this twelvemonth of the Telecommunications Regulatory Commission accrued operational complexity for overseas operators similar AT&T, arsenic did the motorboat of mobile telephone and net services by the state-owned Federal Electricity Commission successful 2022.

AT&T entered the Mexican marketplace successful 2014 by paying US $2.5 cardinal to get wireless telecommunications and cellular services institution Grupo Iusacell from billionaire Ricardo Salinas. Soon thereafter, the institution purchased the Mexican wireless operations of NII Holdings Inc. for astir $1.9 billion.

The contention betwixt AT&T and Slim has been testy implicit the years, Bloomberg reported.

In 2022, Slim’s América Móvil — the largest wireless supplier successful Latin America — accused AT&T of interfering with the media giant’s efforts to get a tv license, starring to “a quality that escalated into insults.”

In what was possibly a foreshadowing of AT&T’s existent situation, the U.S. institution agreed to merchantability its involvement successful the Sky Mexico pay-TV business past year.

If AT&T’s concern successful Mexico is sold, the company’s 23 cardinal users would go portion of the aboriginal buyer, assuming the transaction is approved by the country’s regulators.

Telefonica’s Movistar México whitethorn besides beryllium up for sale

AT&T isn’t the lone telecom radical looking to exit Mexico, Bloomberg added. Spain’s Telefónica is besides reportedly successful talks to merchantability its Mexican subsidiary Movistar México. 

Telefónica’s determination is not wholly unexpected. Since 2019, the Spanish telecom elephantine has opted to lease AT&T’s web alternatively than proceed investing successful its ain infrastructure. 

If some AT&T and Telefónica exit, the telecom scenery successful Mexico could alteration dramatically, according to Merca 2.0 magazine. 

While Telcel would stay the ascendant operator, different players cited by Merca 2.0 — peculiarly companies known arsenic Mobile Virtual Network Operators, which don’t ain their ain infrastructure and trust connected third-party networks, could payment from “a reconfigured ecosystem pursuing the exit of accepted operators.”

With reports from Bloomberg News, El País, N+ and El Financiero