AM to divest assets as quickly as possible; speculation mounts over AT&T approach

14 Jul 2014

America Movil (AM) plans to divest selected assets as quickly as possible in order to escape tougher regulation, spokesman Arturo Elias told Reuters, adding that the Mexican behemoth hopes to sell said assets to a single buyer. As reported by TeleGeography’s CommsUpdate last week, billionaire owner Carlos Slim is ready to sell off parts of his domestic telecoms business in an effort to cut his company’s market share across the Mexican telecoms sector below 50%, thus avoiding regulations that apply only to dominant players.

Speculation has already begun to emerge over who might buy the surplus assets, with AT&T seemingly in a strong position. The US telecoms giant already boasts a strong relationship with AM, and sold its 8.3% stake in the Mexican telco for USD5.57 billion to a company controlled by Slim last month, clearing a potential antitrust hurdle in the process. Industry insiders have estimated the spun-off assets to be worth in the region of USD10 billion.

According to TeleGeography’s GlobalComms Database, as of 31 March 2014 AM subsidiary Telcel controlled 70.6% of the Mexican mobile market, while sister company Telmex occupied 64.2% of the broadband market and over 90% of the wireline sector. As such, if a newcomer strikes a deal to buy AM’s surplus operations, it will start life with a 20.6% mobile market share, a 14.2% slice of the broadband segment and 40% of the fixed line market – automatically making it the second largest operator in each of those markets.

Mexico, America Movil (AM), AT&T, Radiomovil Dipsa (Telcel), Telefonos de Mexico (Telmex)