Narayan AmmachchiEl Paso-based Flo Networks has acquired American Tower’s optical fiber business in Mexico for US$252 million, gaining a larger footing to challenge the dominance of America Movil.
This is Flo’s second big acquisition in Mexico in less than two years. The company purchased Maxcom Telecomunicaciones’ fixed telecom assets in November 2021.
With the addition of American Tower’s assets, Flo will now have over 20,000 miles of fiber in Mexico and the United States, connecting nearly 10,000 enterprise buildings.
American Tower acquired the telecom assets from KIO Networks in 2017 for US$500 million. The company has been struggling with high debt, and the sale of the assets is seen as a way to reduce that debt.
Flo is still a minor player in Mexico’s fixed broadband market, 90% of whose share is held by America Movil alone. However, Flo is hoping that its recent acquisitions will help it to gain a larger share.
Flo was founded in 2001 and originally focused on providing digital infrastructure services. In recent years, the company has expanded its offerings to include cloud computing, video streaming and high-speed internet.
Other companies competing with Flo in Mexico’s fixed broadband market include Megacable, Totalplay and Axtel. These companies offer a variety of services, including cable television, VoIP and Internet.
Fixed broadband is expensive in Mexico compared to other countries in the region. According to a 2022 report by the OECD, Mexico ranks 27th out of 38 countries in terms of the affordability of fixed broadband. The report found that the average price of a 100 Mbps fixed broadband connection in Mexico is US$50 per month, which is more expensive than in most other countries in the region.
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