In what is apparently part of a bold push to take over the Mexican market, AT&T has announced their second carrier acquisition in Mexico in the past week. Just days ago, AT&T bought Iusacell, the third-largest cell provider in the country. Today, they are announcing the purchase of Nextel Mexico for $1.875 billion USD. Nextel is Mexico's fifth-largest carrier.
Among the goals of the transaction is "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 said in a press release. More than just an enhancement of their United States operations, they added that they hope to bring better service and competition to Mexico.
While buying these two companies might sound like it will bring instant market dominance, there are a couple of hurdles still ahead. First of all, given the size of their recent acquisitions, their impending merger is subject to regulatory approval. AT&T is optimistic that this will come relatively quickly, with a "mid-2015" estimated arrival date.
The bigger hurdles, though, are the existing cellular operators in Mexico. As of Q4 2014, Mexico's largest carrier, Telcel, is nearly 20 times as large as Nextel Mexico by subscriber count. Second-largest Movistar is over 5 times larger. The potential combination of Iusacell and Nextel Mexico subscribers still leaves them in a distant third place in that market.
Nonetheless, this should make things interesting. For AT&T subscribers in the United States, reaching friends and family in Mexico should be easier. Recall that AT&T recently announced unlimited calling to Mexico, unique among its competition, as part of its $5 per month World Connect Value add-on.