Mexican based, America Movil said it has agreed to buy back AT&T’s 8.27 percent stake in the company ending a 20 year partnership between the two.
The move enables AT&T to secure regulatory approval for its proposed takeover of DirecTV.
Its shareholders Inmobiliaria Carso and Control Empresarial de Capitales will buy the shares from AT&T International for USD 5.57 billion. AT&T said it expects to realise a profit of 8-10 cents a share from the sale, depending on the final tax on the sale.
Things are heating up in Brazil over broadband as America Movil has publically announced studying the possibility of streamlining its Brazilian operations by merging its cable TV operations with its fixed and mobile carriers. According to America Movil the move could be the best way to gain ground in the hotly competitive Brazilian communications market.
While nothing is set in stone, the plan would structurally integrate Embratel Participacoes, the country’s 3rd-largest wire-line telecom, with mobile operator Telecom Americas, and cable TV operator Net Servicos de Comunicacao. Before the merger is taken to the next phase, however, the companies must carefully look at their options, and no deal has been made yet.
Last year, Mexico’s America Movil blew away the pay-TV competition in Latin America by merging all of its regional operators (Net Servicos, Telmex, Telmex International) to create one solid entity. In doing so, they have swallowed up the competition, holding 22 percent of the regions 51 million subscribers, making it the leader on the continent.
A similar move was made successfully last year by Telefonica, who merged their mobile and fixed-line divisions in Brazil into one single unit.
Many suspect that this may have been inspired by America Movil’s 2012 4th quarter revenue dip. Which was a bit less than previous gains, holding at USD $ 16.2 million. With this new announcement, America Movil plans on kick-starting their Brazilian revenue stream by reorganizing its sources, and making the overall market value more efficient.
For more on America Movil, and how to get the latest telecom info, and inside access, check out Latin Target’s Telecom Plus.
Furthering its ever-growing global presence, Mexican telecommunications giant America Movil has just been awarded exclusive broadcasting rights both the 2014 and 2016 Winter and Summer Olympic Games. The agreement was announced by both the IOC, as well as America Movil press releases, and close out intense competition for the much-coveted rights. While some details about the deal have been released, as of today, no financial terms have been made public.
This is the first time that America Movil has been granted exclusive rights of this magnitude, which include exclusivity to all regions of Latin America except Brazil, where the 2016 games will be held. The move is a historic one for the Mexican company, as the ’16 games will be the first Olympics held in South America, and look to bring massive economic and cultural recognition to the continent. The deal brokered by the IOC also includes the 2014 Winter Olympics to be held in Sochi, Russia.
Both sides are excited about this new partnership, and are confident that they made the right choice; one that will benefit both the public interest, and the respective organizations. According to IOC Finance Commission Chairman Richard Carrion, “They (America Movil) demonstrated a clear passion for the Olympic values and are excited about the Games coming to Latin America in 2016. We believe this is a great deal for our stakeholders.”
Excitement on America Movil’s behalf was just as visible, as the company released a statement via their spokesman stating, “We are extremely pleased to have reached this successful agreement. The Olympic Games will be broadcast across all media platforms in Latin America … helping millions of people in Latin America to have access to the largest international sporting event.”
America Movil is one of the leading providers of cable or satellite TV service in Latin America with 16 million subscribers in 18 countries, except Mexico, where Slim has been trying to get into Television.
Securing the Olympic Games’ rights allows Slim to expand its presence in Latin American’s TV industry but more importantly, it shows his business model’s aim is to offer convergence services, which integrate the dissemination of voice, data, sound or pictures through a single network. For more on America Movil, and other growing telecoms in Latin America, check out our Facebook and Twitter pages.
Mexico. We’ve all heard of the recent political unrest. We’ve all heard the dark tales of violence, corruption, and a seemingly never-ending drug war. But little has said by the outside world about the country’s successes, growth, and position in the new global economy. Meanwhile, beyond the bad news and political propaganda, Mexico has quietly placed itself at the top of the pack in the region; ready to become the region’s economic leader. With recent success in a variety of industries, a prime geographic location, and a strong, cheap workforce, Mexico is poised to become THE place to do business in Latin America, even giving Brazil a run for their money.
Mexico’s economic success is nothing new to anyone familiar with the North American republic. Since the birth of NAFTA during the ’90’s, Mexico has been able to leverage free trade with the US and Canada to bolster its trade market, and in turn ramp up production across a number of industries. Automobile production, consumer services, beverage production/distribution, and telecom have been some of the main industries adding to the economic development, and all have great potential for future growth.
A company like America Movil, ranked #5 on the Latin Target 500 list, is not only growing in Mexico, but also as a MultiLatina expanding further afield is holding dominant market shares in many countries outside the region. This is also happening with companies like FEMSA, who controls a significant part of Coca Cola’s distribution and production, and Grupo Bimbo, who has quietly become the world’s biggest baker and distributor of baked goods. With this wave of sustained growth, many economists predict that within the next 10 years, Mexico may be able to pass Brazil as the region’s top economy.
According to an official report by the U.S. Chamber of Commerce, Mexico has long positioned itself as the world’s most energy secure nation. This statistic was measured amongst the 25 largest energy-consuming countries. Although we may just be realizing it now, this has actually been the case for the past 30 years. While this may not necessarily be great for direct investment due to state ownership of Pemex, the country’s larges energy company, it does a lot to help fuel (no pun intended) the local economy. Petroleum and other gas sales represent 40% of the Mexican government’s revenue, thus strengthening government capital, and making it easier for other companies to operate under a stable economic climate.
There are also many residual benefits to this energy dominance, as Pemex works with many companies to help make its operation run smoothly. In recent years, the company has awarded hundreds of millions of dollars worth of development rights to outside businesses, giving private companies long-term contracts. In the first quarter of last year (2012), Pemex reported revenues at USD $10.6 billion, up nearly 30% from the previous year.
The bottom line is that with steady trade and exports (USD $227 billion in 2012), a growing telecom sector, energy stability, and a burgeoning working class, Mexico’s future looks as bright as ever. Industries are growing, investment options are widening, and the world is finally starting to listen. Mexico is poised to become the biggest economy in Latin America, and they are ready for it, one step at a time.
For more insight and access into Mexico’s top companies, including America Movil, FEMSA, and Pemex, take a test drive of Latin Target and find out how Latin Target can enable your sales and marketing teams with contact info on decision makers in the region.
Mexican mobile network, Iusacell and Telefonica’s local subsidiary have jointly announced an agreement to share their network infrastructure in the country.
The combined network will also start LTE trials later this year in anticipation of a commercial launch in 2013.
Under the terms of the agreement, which is slated to last for at least five years, Iusacell will gain access to Telefonica’s rural network, while Telefonica should be able to improve coverage in the cities, where Iusacell is stronger.
The network sharing deal is limited to their towers and fibre-optic networks. Where one network has coverage that the other lacks, roaming between the networks will be possible.
The companies declined to detail any commercial aspects of the deal, which still needs clearance from the regulator.
The move may help the two companies cut costs and compete with America Movil, which dominates the Mexican market with a market share of around 70%..
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ZTE has entered an agreement to provide managed services to Colombian mobile operator Comcel. The deal will make ZTE the largest managed services provider in the country.
As part of the agreement, ZTE will provide equipment including BTS and power equipment.
Comcel has 30 million subscribers and is the largest mobile operator in Colombia. It is owned by Mexican América Móvil.
In 2011, ZTE signed a contract to provide managed services to Telefónica-Telecom, the largest fixed line operator in Colombia. The company’s agreement with Comcel means it will provide services to more than 6,000 sites, the most of any provider in Columbia.
“We are pleased with the expansion of telecoms services in Colombia and the South American market,” said ZTE Columbia Vice President Zhang Dianjun. “The agreement with Comcel will help the operator provide customized services to its users.”
The two new mobile networks in Costa Rica have signed up around 500,000 customers since they launched last December.
According to Inside Costa Rica, Telefonica’s Movistar has some 300,000 customers, while America Movil’s Claro network has the remaining 200,000 customers.
It was not clear yet if these are customers closing their account with the former incumbent network, ICE or if they are holding dual SIM cards.
Both Telefonica and America Movil were granted licenses last January to break the monopoly held by ICE. The two companies paid US$95 million and US$77 million respectively for their licenses.
The government was obliged to open up the market to competition as a condition of entry into the Central American Free-Trade Agreement.
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