Nearshore Americas

AT&T Bets on Wireless Networks to Outmaneuver America Movil in Mexico

AT&T is continuing to expand its 4G LTE network in Mexico, as the U.S. telecom giant intensifies its attempt to grab a larger slice of the market heavily dominated by local telecom behemoth America Movil.
At the current rate of expansion, its high-speed wireless networks will cover most of Mexico by the end of 2016, according to capital market analyst firm Zacks Research.
Currently, the service spans 111 Mexican cities. People can access the operator’s super-fast network at no extra charge. All they need is an LTE-enabled smartphone and SIM card.
To counter the growth of AT&T, America Movil is offering bundled telecom services at discounted prices and investing heavily in new telecom networks.
But the U.S. firm has other weapons in its arsenal to outmaneuver Carlos Slim’s preponderant player, recently introducing an innovative “Mobile without Borders” plan, which allows subscribers to make calls to Canada and the United States without roaming charges.
AT&T is also experimenting on 5G networks, which could make it the first to introduce the service in Mexico.
Another factor favoring AT&T is that America Movil is under tremendous pressure by Mexican regulators to reduce its market share below 50%.
Since 2014, the U.S. firm has spent US$4.4 billion on acquisitions in Mexico. It has also unveiled plans to spend an additional US$3 billion and sign up 100 million Mexican customers for 4G services by the end of 2018.
With the U.S. market all but saturated, AT&T is doing everything it can to penetrate deep into the Mexican market. The wireless penetration rate is still lower in Mexico compared to the U.S., so analysts expect increased competition in Mexico going forward.
Mexico is home to a growing middle class population that is eager to spend more on high-speed wireless networks for more optimal use of smartphones and tablets.

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Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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