Millicom has declined comment on a report that it is considering entering the Mexican market, which is undergoing a series of regulatory reforms aimed at curbing the dominance of América Móvil.
Millicom (STO:MIC) has declined comment on a report that it is considering entering the Mexican market, which is undergoing a series of regulatory reforms aimed at curbing the dominance of América Móvil. According to local newspaper El Economista, rumours that the Swedish operator was reviewing the opportunity to offer converged services have been circulating for two months. It cited two sources familiar who confirmed Millicom’s intentions to enter the market, but said it had yet to make a firm decision.
In an interview with TelecomFinance last July, CEO Mauricio Ramos said: “Our strategy is to be a converged operator, providing seamless, integrated services across fixed and mobile. First, we build our mobile position and then build a cable footprint underneath that.”
Ramos added that the company aimed to offer the same content as its Latin American rivals, and then differentiate by producing local content where appropriate.
The El Economista article listed possible modes of entry as an acquisition, the purchase of infrastructure capacity from a third party, becoming an MVNO, taking advantage of the planned shared 700 MHz network, or using Telmex’s recently unbundled fibre network last mile to offer internet or video in competition with Totalplay, Axtel TV or Izzi Telecom in urban areas.
The report suggested that setting up a greenfield mobile operation would be difficult, considering that the deadline to participate in the AWS spectrum auction has now passed.
Given this, the company would most likely offer pay-TV, fixed and/or mobile broadband, and also pioneer mobile payments, experts were quoted saying.
According to one of them, Millicom could follow the example of AT&T – which last year acquired both Nextel and Iusacell – but in fixed-line, rather than mobile.
Other major changes to the market in 2015 included América Móvil‘s separation and listing of towerco Telesites, an agreed merger between Axtel and Alestra and a statement by Telefónica’s CFO that it could consider a local IPO. At the end of the year, sector regulator the IFT allowed spectrum swapping for the first time.
The company, which trades under the Tigo brand, derived US$1.4bn of its total US$1.64bn in Q3 revenue from its Latin American businesses. The remaining US$241m came from its African subsidiaries: Chad, Rwanda, Senegal, the DRC and Ghana.
In Latin America, it has entered markets as a mobile challenger and gone on to acquire cablecos within its existing footprint. It is increasingly providing mobile financial services in both Latin America and Africa.
