Let’s stop complaining about how unfair USA carriers are and take a look down south at our neighboring country. Mexico’s cellphone market puts the USA carriers to shame. The country now holds about 120 million cellphone subscribers, of which over 73.5 million are under a single carrier – Telcel. It’s no surprise their slogan is “All of Mexico is Telcel territory”.
The telecommunications monopoly is no joke under the leadership of Carlos Slim, the second wealthiest person in the world (only surpassed by the very Bill Gates). Cellphone prices are simply unreal in Mexico. They are much higher than in the USA, which doesn’t make sense for a country with a significantly lower economy. It’s clear some changes need to happen, and USA carrier AT&T may be pioneering the mobile revolution in Mexico.
Mexican President Enrique Pena Peña Nieto’s latest reforms were welcomed with high criticism, but they will definitely help balance the cellphone market. Competing against Telcel is not only hard for Mexican carriers… it’s damn right near impossible.
Now that foreign companies can acquire Mexican ones, AT&T is moving in with a $2.5 billion acquisition of Iusacell. This carrier only holds about 7 million of Mexican cellphone users, but the company has been known to offer competitive prices. This results in a recent boost to their recent growth.
The deal is expected to go through in early 2015, after Mexico’s IFT (Instituto Federal de Telecomunicaciones) passes the deal. Let’s just hope Carlos Slim doesn’t try to “persuade” them into blocking the acquisition.
What does this mean for the Mexican mobile market?
When everything is done and sealed, we can expect to see a steady stabilization in the Mexican mobile market. With AT&T’s resources and expertise at hand, the arguably small carrier can now start investing into its network, which can currently only cover about 70 million of those 120 million users.
Iusacell’s network and tech would then be able to compete much more closely with Telcel and Movistar. This would mean there will no longer be as much of an incentive to stick with Telcel, as another network could offer similar coverage and services. And with more competitive prices, Iusacell can finally start luring more users in.
Hopefully this can convince Telcel to lower its prices too, making this deal a winning situation for the important factor in the equation, which is obviously the consumer. And talking about consumers…
What does this mean for the users?
Here is the exciting part for both AT&T and Iusacell subscribers. This deal will accomplish something that is simply unbelievable. The telecommunications border between the USA and Mexico will be taken down.
“Iusacell gives us a unique opportunity to create the first-ever North American Mobile Service area covering over 400 million consumers and businesses in Mexico and the United States. It won’t matter which country you’re in or which country you’re calling – it will all be one network, one customer experience.” -AT&T
The wording is a bit odd, but it seems like we are talking about getting rid of (or at least alleviating) roaming and long distance fees. Now that is huge, guys. Carriers like Verizon and AT&T currently offer some awesome plans for calling and roaming in Mexico, but nothing like this. The same would apply for Mexican subscribers roaming in the USA.
A brighter future for both sides of the border?
We are glad to see these changes coming, and I know my fellow Mexican geeks will be, as well. But what does this mean for the USA market? Will other US carriers be able to compete against what AT&T and Iusacell will be offering?
These countries are close partners; physically, politically and culturally. Each other’s actions cause a reaction to the other, and we also hope AT&T didn’t just find a way to affect competition without even touching the USA system.