By Anthony Harrup
MEXICO CITY--U.S. telecommunications giant AT&T Inc. plans
substantial investments in Mexico to expand and upgrade its mobile
network as it seeks to increase market share and become a leader in
the industry, AT&T Mexico's Chief Executive Thaddeus Arroyo
said Wednesday.
AT&T bought mobile-service provider Iusacell in the first
quarter for $2.5 billion, including debt, and in late April paid
$1.88 billion for NII Holdings Inc. unit Nextel Mexico.
"Right now we're totally focused on integrating the assets we
just bought," Mr. Arroyo said in a meeting with reporters. "Our
long-term goal is to be a leader in the market."
The Dallas-based company's decision to enter Mexico follows
changes in local telecommunications laws that imposed stiff
regulations on dominant carrier América Móvil, and has been
welcomed by the Mexican government as an example of positive
results from the overhaul.
Mexico's Economy Ministry said Wednesday that the Iusacell
purchase contributed $2.04 billion to the $7.57 billion Mexico
received in first-quarter foreign direct investment. AT&T had
subtracted from foreign direct investment in Mexico last year when
it sold its 8.3% stake in América Móvil.
Mr. Arroyo didn't specify how much AT&T plans to invest in
coming years as it seeks to step up competition for América Móvil
and Spain's Telefónica, but said much of the investment will come
in the next two years to accelerate growth.
The U.S. company reported six million subscribers at Iusacell at
the end of March, after adjusting down the number from 9.2 million
when it acquired the Mexican company.
"This is quite normal. When we buy a company, we apply our own
rules on how we count customers. We'll do the same thing with
Nextel," Mr. Arroyo said. Nextel Mexico had around three million
subscribers when AT&T agreed to buy it in January.
Telefónica reported strong subscriber growth in the first
quarter, increasing its number of mobile customers in Mexico by 17%
on the year to 22.5 million. The company cited intense marketing
efforts and new regulations, such as the elimination of charges to
connect calls to the América Móvil network, in reporting a 70%
increase in operating income. América Móvil unit Telcel had 72.1
million wireless subscribers at the end of March.
Write to Anthony Harrup at anthony.harrup@wsj.com
Access Investor Kit for AT&T, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US00206R1023
Subscribe to WSJ: http://online.wsj.com?mod=djnwires