Markets
AMX

AT&T's 4G LTE Network Expansion Plans on Track in Mexico

U.S. telecom behemoth AT&T Inc.T is gradually expanding its 4G LTE wireless network in Mexico. Currently, this service is available across 12 Mexican cities. It is likely to cover 40 million people by the end of this year and will be made available to 75 million by the end of 2016. Furthermore, the company aims to provide 4G LTE service to 100 million Mexican customers by the end of 2018. Management has decided to invest $3 billion toward the expansion of high-speed mobile Internet network in the country.

Earlier this year, AT&T forayed into the Mexican telecom industry with the acquisition of Gurpo Iusacell and Nextel de Mexico for a total consideration of approximately $4.4 billion. Last year, the government of Mexico had introduced several reforms within its telecom sector, which was highly monopolistic with one or two major companies dominating the market. With the new reforms opening up considerable scope for investment in Mexico, AT&T is striving to capitalize on the opportunity.

The acquisitions of Grupo Iusacell and Nextel de Mexico have added around 12.2 million subscribers to AT&T's kitty. The combined synergies from the two buyouts have positioned AT&T as a formidable player in the lucrative wireless market of Mexico. At present, America Movil SAB AMX controls nearly 70% while Telefonica SA TEF commands around 20% of the Mexican wireless market.

AT&T also plans to create a North American mobile service area covering more than 400 million customers and businesses enterprises in Mexico and the US. In Oct 2015, the company 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. AT&T currently holds a Zacks Rank #2 (Buy).

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

Mexico is the largest economy in the Latin American region with a growing middle class population that is eager to spend more on high-speed wireless networks for more optimal 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