Spain’s Telefonica is exploring acquisition opportunities for its Mexican mobile unit Movistar as it looks to take on local incumbent America Movil.
Santander and BBVA have been mandated and talks have been held with a number of potential targets to…
Spain’s Telefonica is exploring acquisition opportunities for its Mexican mobile unit Movistar as it looks to take on local incumbent America Movil.
Santander and BBVA have been mandated and talks have been held with a number of potential targets to expand Mexico’s second largest wireless operator, three people familiar with the matter told Bloomberg.
The country’s third largest operator Iusacell – which Telefonica shares infrastructure with – is the most likely purchase, the report said.
DTH and cable giant Televisa and triple play operator Megacable are also being considered, but their owners are said to be reluctant to sell. Telefonica declined to comment on the report.
An expansion in Mexico would come as the country’s new beefed-up telecoms regulator, the Instituto Federal de Telecomunicaciones (IFT), takes its first steps in addressing AMX’s monopolies in the wireless and fixed-line markets.
The IFT has begun the process of deciding which operators to declare as dominant, which is roughly defined as having a market share of more than 50%. Once an operator is deemed dominant the IFT can impose asymmetrical regulation on it, and has the power to revoke licences and demand asset sales if telcos do not comply with its orders.
It is too early to say how the new regulator would react to a Telefonica takeover of Iusacell. While it would create a stronger rival to battle AMX – which has 70% of the wireless market – it would also merge Mexico’s second and third largest mobile operators.
The Spanish incumbent has recently hits its net debt target after a period of refinancing and asset sales, and it is now looking for growth opportunities.
This started in August when it agreed to buy KPN’s German subsidiary E-Plus to bolster Telefonica Deutschland. The merger, which would see the wireless market shrink from four operators to three, is currently being reviewed by the European Commission.
Telefonica is also looking to take over investment vehicle Telco, the controlling shareholder of Telecom Italia.
Meanwhile, the operator is seeking to complete the sales of O2 Ireland, to Hutchison, and Telefonica CR, to local investor PPF.
