Markets
AMX

AT&T Launches Cross-Border Calling for Mexican Customers

The Mexican division of AT&T Inc.T recently introduced a Pan-American cross-border unlimited voice and text-messaging service for new and existing subscribers of the post-paid plans 'AT&T Unidos' and 'AT&T Unidos Prepago' at no additional cost.

Earlier this year, U.S. telecom behemoth AT&T made its foray into the Mexican telecom industry with the acquisition of Gurpo Iusacell and Nextel de Mexico for approximately $4.4 billion. The company has, since then, been actively engaged in bridging barriers between the U.S. and Mexico.

In Feb 2015, AT&T launched a service (for its U.S. customers) which would allow its prepaid GoPhone customers, on $60 data plans, unlimited calling from the U.S. to Mexico, at no extra cost. The company's postpaid customers in the U.S. on World Connect Value plans can also enjoy unlimited calls to Mexico as a $5 add-on.

Meanwhile, AT&T has decided to invest $3 billion to expand its high-speed mobile Internet network in Mexico. The service is likely to cover 40 million people within the next six months and will be extended to 75 million by the end of 2016. The company also intends to provide 4G LTE mobile Internet service to 100 million Mexican customers by the end of 2018.

Last year, the government of Mexico introduced reforms within its telecommunications sector, which has traditionally been highly monopolistic with one or two carriers dominating the market. With the new reforms opening up considerable scope for investment in Mexico, AT&T is striving to capitalize on the opportunity.

As per the reformed norms, Mexican telecom regulatory body Federal Telecommunications Institute (IFT) identified America Movil S.A.B. AMX as the dominant player in the market. Telefonica S.A. TEF was the other major player.

In Jul 2015, America Movil introduced a pan-North American roaming charge free calling facility. Per the plan, postpaid subscribers of the company's Telcel wireless subsidiary will get unlimited calling, text messaging data transfer services to the U.S. without any roaming charges. Subscribers can enjoy this facility for an additional 50 Mexican Pesos (around $3.15) per month.

Later on, America Movil plans to extend the same to its prepaid wireless customers in Mexico, which constitute nearly 80% of the company's total subscriber base. Management also aims to offer this type of roaming free wireless connectivity in Canada over the long haul.

Meanwhile, T-Mobile US Inc. TMUS has introduced an innovative "Mobile without Borders" plan through which its subscribers will be able to make calls to Canada and Mexico without paying any roaming charges.

Mexico is the largest economy in the Latin American region with a growing middle class population eager to spend more on high-speed wireless networks for facilitating the use of smartphones and tablets. Also the wireless penetration rate is relatively lower in the country compared to the U.S. We, therefore, expect increased competition in this market going forward.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AT&T INC (T): Free Stock Analysis Report

TELEFONICA S.A. (TEF): Free Stock Analysis Report

AMER MOVIL-ADR (AMX): Free Stock Analysis Report

T-MOBILE US INC (TMUS): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

AMX TMUS T TEF

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More