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Mexico's telco reforms trigger change in competitive market dynamics

London - 28 May 2015

Mexico’s telecommunications reform is re-invigorating investment in the nation's communications infrastructure. A new report by Current Analysis assesses the next stage in Mexico’s telecommunications market.

Mexico’s telecommunications reform, enacted by domestic regulator Instituto Federal de Telecomunicaciones (IFT) in 2014, is re-invigorating investment in the nation's communications infrastructure. From the 1990s until now, América Móvil, operating as incumbent wireline operator Telmex and wireless provider Telcel (the brand name of company Radiomóvil Dipsa), held an utterly dominant market share, as much as 80% of the nation's fixed lines and 70% of its mobile business. In response to punishing asymmetric regulations that finally held América Móvil to account for its market dominance, the operator has agreed to divest assets to reduce both its wireline and wireless holdings in Mexico below 50%.

A new advisory report from Current Analysis titled 'Mexico: The Next Stage in the Country's Telecommunications Market' looks at the asset divestment proposal that América Móvil is refining. To date, the company proposes to create wireless tower holding company Telesites, controlling 10,800 sites; and divestment of holding company Sercotel, which will inherit MXP30.427 billion (US$2.083 billion) of assets in Mexico. However, América Móvil has yet to identify just what assets it has allocated to Sercotel. Neither proposal is yet a done deal, as regulators have yet to review and approve each plan.

“Telecommunications reform is already having its intended effect. Mexico's regulatory changes underpinned AT&T's decision to re-enter the domestic services market – a market where it exited domestic national network investment about 10 years ago. AT&T has closed acquisitions of domestic wireless operators Iusacell and Nextel Mexico, and its acquisition of US and Latin America regional consumer provider DirecTV is pending,” says Brian Washburn, service director at Current Analysis. Telefonica, under mobile operator brand Movistar, also plans to invest heavily to expand its 4G LTE broadband wireless infrastructure in the country. Other business network services providers present in the market, whether or not they choose to make strategic new investments to take advantage of Mexico's telecommunications reform, include Axtel, Level 3, Verizon, BT Global Services and Maxcom Telecomunicaciones.

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All informations used in this text are based on the Current Analysis report: 'Mexico: The Next Stage in the Country's Telecommunications Market.'

Current Analysis' report looks at the asset divestment proposal that América Móvil is refining.

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Please get in contact if you have any questions to this or other Current Analysis reports. Analysts are available to comment. Contact Verena Niederacher at the Current Analysis press office on +44 (0) 207 936 6536 or email .


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