AT&T’s Mexican Acquisitions Establish Unprecedented Cross Border Network and Provide True Growth Potential

by Matt Klassen on January 28, 2015

As a Canadian living near the U.S. border I’m keenly aware of the ironclad boundaries between the countries’ respective wireless networks, as walking a few metres to the south often means the difference between connecting to my local network and incurring international calling and roaming charges. In fact, for as long as wireless technology has existed, national borders have served as barriers between wireless networks, imaginary walls preventing seamless Web access and affordable calling services.

But with AT&T having officially completed its acquisition of Mexico’s Iusacell after only two months, one of the fastest acquisitions in wireless history, and with news the company has made a bid for Nextel Mexico, Ma Bell has now been presented with a unique opportunity, the ability to transcend national boundaries and join America and Mexico in an unprecedented international web of wireless services.

There’s no question that AT&T’s entry into the Mexican wireless market presents considerable growth opportunities, significantly more than anything available to Ma Bell in today’s stagnant and saturated American wireless market. Having assets on both sides of the border will not only give AT&T the opportunity to offer unique cross-border wireless services, but it will allow the company to grow in a Mexican market starved for competition, a boon for consumers looking for advanced wireless options.

As I mentioned when the Iusacell deal was first proposed, not only does it give AT&T 8.6 million new subscribers and coverage of 70 percent of Mexico’s 120 million people, it gives AT&T something the American telecom market simply can’t provide: growth potential. While the Mexican wireless market is currently dominated by one company, Telcel, recent legislation has forced the company to divest a significant portion of its wireless resources, providing AT&T the perfect opportunity to establish a significant footprint in a market with growth potential, particularly given the country’s sluggish rate of smartphone adoption.

But as I said, beyond the growth potential, the access to a new subscriber base and the chance to compete in a market with only one other serious competitor, AT&T’s acquisition of Iusacell and the pending merger with Nextel Mexico will give Ma Bell the opportunity to establish an unprecedented cross border network, offering seamless service between countries.

“Iusacell gives us a unique opportunity to create the first-ever North American Mobile Service area covering over 400 million consumers and businesses in Mexico and the United States,” AT&T CEO Randall Stephenson said in a statement. “It won’t matter which country you’re in or which country you’re calling — it will all be one network, one customer experience.”

The benefits for AT&T aside, this merger also stands as a significant boon for Mexican wireless subscribers who have long been trapped under the thumb of a veritable Telcel monopoly. Able to offer competitive rates, new services and features in addition to likely investment in Mexico’s wireless infrastructure, AT&T’s Mexican rivals will need to update themselves in order to stay competitive, sparking wireless advancement that could conceivably have far a reaching impact across all of Mexico’s economy.

Not only that, but with news breaking today that AT&T is also looking to acquire Nextel Mexico, a deal, if approved, that would make AT&T one of the country’s largest providers, it’s clear Ma Bell is making an aggressive push into this new market and establish itself as a premiere wireless player on both sides of the border.

Simply put, as wireless acquisitions go AT&T has seemingly hit a homerun, establishing a footprint in a foreign market with significant growth potential, but one that is close enough to home that it will undoubtedly transform wireless services on both sides of the border.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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