Telefónica Móviles Mexico to launch GSM

9 Jan 2003

Just four months after acquiring local CDMA operator Pegaso PCS, Telefónica Móviles’™ Mexican subsidiary has announced plans to broaden its presence yet again through the deployment of a nationwide GSM/GPRS network. The announcement has come as a surprise to analysts, who have expressed concerns that the move will lead to the Spanish operator discarding its current CDMA operations, but TM has stated that it has no intention of getting rid of the existing network, but instead will operate over both as it has sufficient spectrum to do so. Pegaso, which holds PCS licences in all nine of Mexico’s cellular regions, was TM’s fifth local acquisition in Mexico, following its purchase of A-band licensees Norcel, Cedetel, Bejacel and Movitel in 2001; it hopes to use Pegaso’s CDMA network as a stepping stone towards W-CDMA technology. The operator plans to begin building out the GSM network straight away with a deployment strategy expected to be launched later in the year. It hopes that the new technology will enable it to become a realistic competitor to the country’s largest cellco, Telcel, which has been offering a GSM service since October 2002.

At the end of September 2002 Telefónica Móviles Mexico had a total customer base of 2.25 million – a 9% market share – 1.94 million of which were connected to pre-paid packages. Its rival América Móvil subsidiary Telcel could claim a total of 19.35 million subscribers at the same date, controlling around 77% of the market.

CIT’s Yearbook of Latin American Telecommunications 2003