AT&T Wireless has announced this morning that they are buying up Mexican wireless provider Lusacell, which is said to cover about 70% of all of Mexico with its network, and accounts for about 8.6 million subscribers in the country. AT&T's goal is to expand the Lusacell network and cover millions of new customers, which will range from personal accounts to business customers across the country. Interestingly enough, Mexico has about 120 million people and Lusacell's network covers about 70% of them, but they only have about 8.6 million customers, this is where AT&T most likely sees an opportunity for some growth.
At the moment Lusacell is split up into two owners, one of them being Grupo Selinas, who currently owns 50%, and is in the process of buying up the other half. After that acquisition is finalized, AT&T will acquire Lusacell for the amount of $2.5 Billion USD. The current Mexican President, Pe±a Nieto, was interested in more investment in Mexico and was looking to encourage more competition, and this deal with Grupo Selinas and AT&T is a direct result of the reforms Nieto had put in place according to Randall Stephenson, the current CEO of AT&T. AT&T sees an opportunity to capitalize on the growing demand for mobile internet, and they aim to fulfill that demand with this deal, rolling out world class mobile internet speeds similar to what we have here in the U.S.
For AT&T, this deal makes sense. The U.S has a highly saturated wireless market, and in Mexico the smartphone penetration is about 50% what is in the states. Smartphones are becoming increasingly less expensive however, Android One devices as well as Motorola's Moto E are great examples, and this is where AT&T sees growth. With a large pocket of unsaturated customers that don't have smartphones or access to mobile internet, AT&T is looking to expand and offer these services to that rapidly growing demand to be connected with a mobile device. AT&T's plans are vast, but they seek to make it so that whether you're in the U.S. or Mexico, calling on AT&T's network will still be calling on AT&T's network. One network, two countries, and millions of customers who can seemingly call freely from both places. That is AT&T's vision.