AT&T-Logo-AH-1

AT&T Gets the Go Ahead to Purchase Mexico’s Iusacell Network

December 22, 2014 - Written By Tom Dawson

 

While the US wireless market certainly isn’t a small one, and the two largest networks AT&T and Verizon certainly have enough subscribers and money going around to be more than comfortable, it seems that isn’t enough. AT&T is eyeing further expansion into South America, and they’ve recently been given the go ahead to purchase Mexico’s Iusacell network for $1.7 Billion. You might think that $1.7 Billion figure isn’t exactly a massive purchase for someone like AT&T and you’d be right, as Iusacell is only number three in Mexico, but it’s a foot in the door nonetheless.

It appears as though Iusacell is something of an underdog south of the border, which does raise questions concerning AT&T’s eagerness to purchase the network. Iusacell is the third-largest network in Mexico, and is currently owned by Grupo Televisa, the country’s largest broadcaster, and Grupo Salinas. The Mexican authorities have now approved the sale of Televisa’s 50% in the company back to Grupo Salinas, which will then sell the company wholesale to AT&T for the aforementioned sum of $1.7 Billion.

Mexico’s Federal Competition Commission, the country’s competition regulator, has been shaking things up in the region this year with an aim to open up the wireless market and weaken big monopolies held by America Movil. This same board has imposed undisclosed conditions on the AT&T deal, which they say will “avoid risks to the process of competition”. This deal doesn’t seem too important for AT&T, but South America is a large, growing market when it comes to wireless and getting in now seems like a smart move. Whether or not AT&T takes Iusacell to new heights, or simply keeps the network rolling is something we’ll have to wait and see about, but it is interesting to see AT&T move into a market like this. Purchasing a network placed in a distant third might not sound all that exciting, but they still have purchased a whole network, given them a little more freedom than simply purchasing shares. Without knowing what those conditions imposed by the regulators are though, it’s hard to say how much freedom AT&T will have.