By Anthony Harrup 

MEXICO CITY--Mexican telecommunications company América Móvil SAB on Friday approved the spinoff of its cellular towers into a separate company, part of a restructuring plan that will see billionaire Carlos Slim competing for the first time to rent infrastructure to rivals in the mobile market.

América Móvil shareholders endorsed the creation of a new company called Telesites SAB, which has 10,800 communications towers, most of which can host several wireless operators.

Initially, its only client will be América Móvil's own wireless unit Telcel, the dominant mobile operator in Mexico with 71 million subscribers and about a 70% market share.

Shareholders will receive one Telesites share for every América Móvil share they own.

The spinoff, which is still at least six weeks away, responds to regulatory measures that América Móvil faces as the dominant fixed-line and mobile carrier in Mexico. Aside from required network sharing, América Móvil has to pay to connect calls to rival carriers while completing incoming calls without charge.

Although Mr. Slim's company pledged "arms-length" commercial relationships between Telesites and Telcel on equal terms to those granted to other operators, the new concern faces the same regulations that apply to América Móvil regarding access and infrastructure sharing. Regulators can set rates to be charged by Telesites if agreement isn't reached with customers.

With a tower density about a quarter of what it is in the U.S., Mexico offers much room for growth in the towers business, said Spencer Kurn, a telecom analyst at New Street Research in New York.

Mexico could follow what happened in the U.S., where the number of towers increased rapidly in the past decade on demand for wireless broadband services, he said. "It's the explosion of data growth that has driven site expansion in the U.S."

The spinoff creates a new competitor for American Tower, the largest of Mexico's tower operators with around 8,750 sites owned or operated in the country at the end of 2014.

There will definitely be an impact on American Tower, although Mexico only accounts for about 8% of the Boston-based company's global revenue, Mr. Kurn said.

AT&T's Inc.'s recent entry into Mexico with the acquisition of mobile company Grupo Iusacell made the outlook for American Tower a bit better, and with the emergence of Telesites "now it's a bit worse," he added.

American Tower didn't respond to requests for comment on the implications of the Telesites spinoff. AT&T declined to comment on whether it would consider leasing space from Telesites.

American Tower rents space in Mexico to Iusacell, Spain's Telefónica, and to NII Holdings Inc.'s unit Nextel Mexico, which AT&T has also agreed to buy. América Móvil is a client of American Tower in parts of Latin America and the Caribbean.

América Móvil noted in a report that regulators estimate Mexico needs to expand its number of radio bases to 80,000 from around 20,000 at present, "creating an important growth opportunity for Telesites."

"We agree that growth of 3G and 4G data services should underpin strong growth in the tower market," analysts with Credit Suisse said in a recent report.

"On the other hand, Telesites may have reduced flexibility to negotiate with clients due to its 'preponderance' [dominant] status and competition could increase as the government pushes ahead with its plans for a wholesale access network," they said.

The Mexican government is preparing to seek bids for a nationwide wholesale wireless network that will compete with that of América Móvil. The $10 billion shared network, which will be managed independently by a company not involved in retail mobile services, is expected to be operating by the end of 2018.

Write to Anthony Harrup at anthony.harrup@wsj.com

Access Investor Kit for America Movil SAB de CV

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=MXP001691213

Access Investor Kit for AT&T, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US00206R1023

Access Investor Kit for America Movil SAB de CV

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US02364W1053

Access Investor Kit for America Movil SAB de CV

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US02364W2044

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

AT&T (NYSE:T)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more AT&T Charts.
AT&T (NYSE:T)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more AT&T Charts.