Telefonica and NII Holdings sign wholesale deal covering Brazil and Mexico

14 Jan 2014

Spanish telecoms giant Telefonica and US-based NII Holdings have inked an agreement under which the former will provide wholesale nationwide voice and data coverage services to the latter’s Nextel-branded units in Brazil and Mexico. In a press release confirming the deal, NII Holdings said that, when implemented, it ‘will expand the areas in which Nextel customers using 3G services in Brazil and Mexico can access voice and data services, supporting NII’s growth strategy’. Telefonica and NII Holdings will reportedly work closely to implement the agreements ‘as soon as possible’, while it was also noted that the two companies will continue to manage their spectrum and network assets separately in order to provide competing services.

In Brazil it has been claimed that the deal between NII and Telefonica will allow the latter’s local unit Vivo to more efficiently deploy its network, while providing Nextel with access to a broader service area across the country. For its part Nextel Brazil will continue to expand its own network while complying with the regulatory coverage requirements imposed by Brazilian telecoms regulator Anatel. Meanwhile, in Mexico the commercial agreement will allow Telefonica’s Movistar Mexico subsidiary ‘leverage the capacity already deployed in its 3G network and will provide another lever for strengthening its wholesale strategy in the country’. Further, it has been claimed that the agreement between the two parties in Mexico ‘shows the commitment of both companies to efficiently provide additional services to the marketplace consistent with the goals of the telecommunications regulation reform initiatives that are being implemented in [the country]’.

Commenting on the development, Santiago Fernandez Valbuena, chairman and CEO of Telefonica Latin America, was cited as saying: ‘The agreement allows both companies to capture the benefits derived from the optimisation of infrastructure investment while maintaining the current market structure in both Brazil and Mexico.’ NII Holdings’ chief executive Steve Shindler meanwhile said of the partnership plans: ‘Our new agreements with Telefonica will enhance our service offerings by giving us the ability to provide our 3G customers in Brazil and Mexico with services in more areas in those markets … Our access to Telefonica’s networks under these agreements will also allow us to utilise Telefonica’s networks as we continue to expand our own coverage footprint to provide our customers with service that meets their needs.’