Cellphone Plans: AT&T Targets Mexican Wireless Users, Hopes to Acquire Nextel Mexico
AT&T is shifting its focus to Mexico now that the U.S. has reached 100 percent mobile penetration.
Market Realist reports mobile penetration in Mexico was only at 86 percent as of the end of 2013. AT&T wants to reach more customers in Mexico and encourage the use of mobile data as well.
In Mexico, mobile subscribers grew at an average annual rate of about seven percent between 2008 and 2013. As more wireless opportunities become available, the growth of subscribers has slowed recently. Surprisingly, only 13 percent of Mexicans were using standard or dedicated mobile data plans in 2013. This gives AT&T a big opportunity to get more residents in Mexico to use mobile data.
Mexico has the lowest broadband penetration of the 34 Organization for Economic Co-operation and Development (OECD) countries.
One way AT&T can increase its presence in Mexico is by acquisitions. In January, AT&T completed the acquistion of Iusacell for $2.5 billion. Iusacell is a wireless provider in Mexico with 70 percent coverage, and AT&T was able to gain 8.6 million wireless subscribers with the acquisition.
AT&T is also in the works to acquire Nextel Mexico. Nextel Mexico had filed for bankruptcy protection in September of 2014. If the merger is complete, it would be for about $1.875 billion and give AT&T a gain of 2.8 million wireless subscribers.
According to NASDAQ, the Nextel Mexico and AT&T deal is on track and has cleared a major milestone. The only hurdle the deal has is if a competitor would place a competing bid for Nextel Mexico. AT&T plans to integrate Nextel Mexico with Iusacell.
What do you think about AT&T's plans in Mexico? Can the company help the country become more connected?
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