US incumbent AT&T (NYSE: T) has begun rebranding its recently-acquired Mexican operations under its own name as it seeks to compete against dominant player America Movil (NYSE: AMX).
AT&T Mexico CEO Thaddeus Arroyo said at a news conference that the company launched several new plans on Mondayunder the AT&T brand and will start rebranding stores by the end of the year, the Wall Street Journal reported. The rebranding process is expected to be completed by the end of 2016, he said. The Unefon brand, however, which was part of Iusacell, will remain in place for prepaid customers.
AT&T acquired Iusacell, Mexico’s third-largest wireless carrier, for US$2.5bn in January and smaller player Nextel Mexico for US$1.88bn in May. The purchases followed regulatory changes aimed at attracting foreign investors and boosting competition in a market dominated by Carlos Slim’s America Movil.
Arroya said AT&T is already boosting competition in the market, noting that its move to allow Mexican customers to use their plans in the US without any extra charges has prompted rivals to introduce similar plans.
The Dallas-based telco has said it intends to create the first ‘North American Service Area’, covering more than 400 million individual and business customers in the US and Mexico.
In June, AT&T announced that it intends to invest US$3bn through 2018 to extend LTE services to 100 million people in Mexico.
Arroya said AT&T has eight million subscribers in Mexico, representing less than 9% of the market. America Movil has 68% market share and Telefonica is a distant second, recording 23 million wireless subscribers at the end of Q2 2015.
New telecoms regulations in Mexico require America Movil to reduce its market share to less than 50%.
AT&T was not immediately available for further comment.
Watchdog investigates America Movil
Meanwhile, America Movil’s Mexican fixed-line unit Telmex is under investigation by the country’s telecoms regulator for potential violations of its concession banning it from offering TV services.
The Mexico City-based telco said the administrative proceedings brought by the IFT relate to its commercial agreements with satellite TV provider Dish Mexico to do with billing and collection services, distribution and equipment leases, and the ‘Uno TV’ internet service. The IFT is also looking into alleged breaches of the Mexican Constitution and telecoms and broadcasting laws.
“AMX and Telmex are currently analysing the scope and legal grounds of the alleged violations in order to participate in such proceedings and, as the case may be, exercise applicable legal remedies,” the telco said.
Early this year, the IFT fined Telmex Ps14.4m (US$985,000) for not disclosing an agreement with Dish, which the regulator argued amounted to a merger. Dish Mexico, a joint venture between Mexico’s MVS Comunicaciones and the US’s EchoStar, was fined Ps43m (US$2.95m).
At the time, America Movil insisted that it only as a commercial partnership with Dish.
America Movil and Dish Mexico were not available for comment before deadline.
