AT&T is reportedly considering acquiring some assets of America Movil in Mexico in order to formally expand into Latin America.
Carlos Slim’s America Movil has no option but to sell some of its telecom assets to comply with Mexico’s recent telecom reforms that prohibit carriers from controlling more than 50% of the market share.
The speculation stems from a recent comment from AT&T’s Chief Strategy Officer John Stankey at an investors’ conference, in which he hinted at his firm’s desire to expand operations in Latin America, particularly Mexico.
AT&T has a long relationship with Carlos Slim, who had only recently bought back AT&T’s 8% stake in America Movil in order to help the U.S. carrier comply with competition laws with regard to its acquisition of DirecTV.
AT&T gained a foothold in the Latin American telecom market through that acquisition and analysts say its arrival in the Mexican telecom market will make it more competitive and dramatically reduce broadband prices.
Though DirecTV is mainly a pay-TV service provider, it has recently widened its mobile broadband footprint across the region. It is already providing mobile broadband services in Brazil and Argentina and is preparing to introduce the service in Colombia this quarter.
With the U.S. telecom market all but saturated, AT&T is seeking to diversify its business away from America and has long viewed Europe and Latin America as possibilities for expansion.
In an another development, Telecom Italia is considering acquiring Brazilian carrier Oi to challenge the dominance of Spanish operator Telefonia.
Telecom Italia, operating under Tim Participacoes in Brazil, is said be eyeing Oi’s extensive fixed line network, which could help the Milan-based carrier offer bundled services in the South American country to offset the falling revenue for its voice services.