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AT&T's Iusacell Deal Could Change Mexico

By Jeff Kagan
Jan 22, 2015 6:34 AM PT

AT&T recently completed its acquisition of Mexico wireless carrier Iusacell -- so what does that mean for the future of AT&T? The growth potential is enormous, if this is done right.

AT&T's Iusacell Deal Could Change Mexico

The first step is over. AT&T has closed the acquisition. It was one of the quickest deals ever, taking roughly two months from start to finish.

The second step is also complete, with AT&T's Thaddeus Arroyo being promoted to CEO of Iusacell.

There will be many more steps ahead as these two companies start to weave their intricate web for growth. There are many questions. We'll just have to wait and see how this develops.

Huge Potential Footprint

Will the companies be able to work together or will they operate independently? Separately, AT&T can continue to grow both. Together, there is a unique opportunity for growth -- creation of the first-ever mobile service area covering both the U.S. and Mexico.

Why the acquisition? Growth. Public companies need to continue to show growth to keep investors happy. This kind of deal should help AT&T accelerate growth. That should keep investors happy.

This was a US$2.5 billion deal -- no small change. AT&T acquired Iusacell's licenses, its retail stores, its network and more than 9 million subscribers. This acquisition gives AT&T a chance to compete for 120 million customers in Mexico.

That's one hell of a foot in the door of the Mexican marketplace. In addition to growth for AT&T, I would say there is an opportunity to transform the Mexican wireless industry as a whole. If so that could transform other parts of the country's economy as well.

If AT&T executes its grand plan to create the first North American mobile service area, it will cover more than 400 million consumers and business customers in the U.S. and Mexico. That is very exciting potential.

Whether these companies remain separate or start to work together, this acquisition can be a big winner. Wireless carriers like AT&T and Verizon have been looking for new ways to expand growth outside the U.S. This is the first big move in that direction.

Ripple Effect

Joining the wireless worlds of the U.S. and Mexico opens the door for many exciting opportunities. What this deal can become depends largely on Mexico. Fortunately, Mexico seems to be waking up to the enormous growth opportunity the wireless industry represents.

The timing seems perfect. America Movil has been divesting certain wireless assets to meet new laws created by President Peņa Nieto. He wants to create more investment, competition and growth in Mexico. That's one huge reason there is so much potential in this deal.

We'll have to wait and see what kind of changes and opportunities it creates. This could mean a real growth partnership between the U.S. and Mexico with regard to calling features, wireless Web and costs.

Bringing wireless calling and the wireless Web to millions more Mexican customers and businesses seems like an enormous growth opportunity, not only for AT&T Mobility, but for Mexico itself.

Competition improves growth for every company. AT&T Mobility has competed and grown in the U.S., where it's up against Verizon Wireless, Sprint, T-Mobile, U.S. Cellular, C Spire, Tracfone and many others.

As AT&T continues to update and offer new services and features at lower prices, it will attract customers. That means other carriers in Mexico will have to update themselves in order to stay competitive.

These are just some of the reasons why AT&T coming to Mexico will bring real competition and real innovation -- two factors that have been missing from that marketplace. That could help transform all of Mexico, not just the wireless industry, one step at a time.

E-Commerce Times columnist Jeff Kagan is a technology industry analyst and consultant who enjoys sharing his colorful perspectives on the changing industry he's been watching for 25 years. Email him at

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