AT&T To Buy Mexican Telco Iusacell In $2.5B Deal

AT&T is acquiring Mexican wireless company Iusacell for $2.5 billion, in a move that will expand the AT&T network to millions of additional consumers and businesses in Mexico.

Through the deal, unveiled Friday, AT&T will acquire all of Iusacell's wireless licenses, network assets and retail stores.

Mexico City-based Iusacell, whose network covers roughly 70 percent of Mexico's approximately 120 million people, also operates under a sister brand, Unefón. Through the deal, AT&T will gain the approximately 8.6 million subscribers under both those brands.

[Related: Solution Providers: AT&T 'Batting 1,000' In IT Channel Offensive]

AT&T said the opportunity for expansion is especially rich in Mexico, since the country's wireless service still lags Latin America overall. What's more, AT&T said it expects smartphone adoption in Mexico to grow rapidly over the next several years.

AT&T said smartphone use in Mexico today is about half that of the United States.

"Mexico is still in the early stages of mobile Internet capabilities and adoption, but customer demand for it is growing rapidly," said AT&T CEO Randall Stephenson in a statement. "This is an opportunity for us to provide Iusacell the financial resources, scale and expertise to accelerate the rollout of world-class mobile Internet speeds and quality in Mexico, like we have in the United States."

Buying Iusacell also will allow AT&T to create what it says is the first-ever North American Mobile Service area for U.S. customers calling or visiting Mexico, or Mexican customers calling or visiting the United States. The idea, AT&T said, is that this will create a single, consistent wireless network that can operate across both countries.

’It won't matter which country you're in or which country you’re calling -- it will all be one network, one customer experience," Stephenson said.

The Iusacell acquisition comes as AT&T, currently the second-biggest wireless carrier in the U.S., continues to grow its footprint in North America as well. AT&T said in October that it added more than 2 million wireless connections in its third quarter, with wireless revenues shooting up 4.9 percent year-over-year to $18.3 billion.

The move also comes as AT&T continues to gain traction with the IT reseller channel through its AT&T Partner Exchange Program. The company held its first-ever Partner Exchange Summit last month in Dallas.

Many mobility-saavy solution providers are partnering with AT&T to round out their mobility practices with AT&T data plans and mobile devices.

Anthony D'Ambrosi, president of Bell Techlogix, an Indianapolis-based solution provider and No. 233 on the 2014 CRN Solution Provider 500 list, said his company already had a robust mobile device management (MDM) business, but wasn't actually selling devices or data plans until he partnered with AT&T.

"Now, I can have a true end-to-end mobile life-cycle management offering, which is very strategically important to my mobility business," D'Ambrosi said in a recent interview with CRN.

AT&T said Friday it expects the Iusacell deal to close in the first quarter of 2015. Iusacell will remain in its Mexico City headquarters after the deal, AT&T said.

PUBLISHED NOV. 10, 2014