Just three days after the acquisition of Grupo Iusacell, the third largest wireless operator in Mexico, AT&T Inc. (T) initiated services which allow unlimited calling from the U.S. to any number in Mexico without imposing any additional charge.
Individuals and business enterprises interested in this offer will have to subscribe to the AT&T World Connect Value package. Meanwhile, existing customers will enjoy this new service free of cost.
The new product is a part of AT&T’s larger strategy to develop a pan-North American mobile service zone to serve individual consumers and business enterprises of the U.S. and Mexico.
Last year, the government of Mexico reformed its telecommunications sector, which was highly monopolistic with one or two companies dominating the market. As the new reforms open up considerable scope for investment in Mexico, AT&T is striving to capitalize on the opportunity.
Mexico is the largest economy in the Latin America region with a growing middle class population eager to spend more on high-speed wireless networks for facilitating the use of smartphones and tablets. Also the wireless penetration rate is relatively lower in the country compared to the U.S.
Notably, Iusacell currently serves approximately 9.2 million subscribers. At present, America Movil SAB (AMX) controls nearly 70% while Telefonica SA (TEF) commands around 20% of the Mexican wireless market.
Meanwhile, AT&T has decided to acquire DIRECTV (DTV), the largest satellite TV operators in the U.S. DIRECTV boasts a strong presence in several Latin American countries. The deal, which is valued at $48.5 billion, is currently under regulatory review.
DIRECTV holds 41% equity method investment in Sky Mexico, the direct-to-home digital satellite TV operator in the country. AT&T currently carries a Zacks Rank #3 (Hold).
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