'

AT&T buying Mexico wireless provider Iusacell for $2.5 billion

AT&T outlined ambitions on Friday of establishing "the first-ever North American Mobile Service area" for U.S. customers calling or visiting Mexico, and Mexican customers calling or visiting the United States.

AT&T is planning on ramping up its coverage across North America with multi-billion dollar deal to acquire Mexico's wireless provider Iusacell.

Special Feature

Next Generation Networks

The rising tides of big data, video, and cloud computing are driving tremendous demand for faster and more efficient networks. We delve into how things like software-defined networks (SDN) and new wireless technologies are enabling business transformation.

Read More

AT&T, the second largest wireless provider in the United States after Verizon Wireless, has agreed to pay $2.5 billion, which includes picking up Iusacell's debt.

Under the deal, AT&T will get all of Iusacell’s wireless properties, including licenses, network assets and retail stores as well as approximately 8.6 million subscribers.

According to AT&T, Iusacell's network covers 70 percent of Mexico’s approximately 120 million people to date.

It operates a 3G wireless network based on the global GSM/UMTS technology also deployed by AT&T in the United States.

That said, AT&T outlined ambitions on Friday of establishing "the first-ever North American Mobile Service area" for U.S. customers calling or visiting Mexico, and Mexican customers calling or visiting the United States.

A cross-border network would end up serving approximately 400 million Mexico & U.S. consumers and businesses, estimated the telco giant in the announcement.

AT&T chairman and CEO Randall Stephenson stressed in prepared remarks, touting the benefits of one network for both countries as well as investment in Mexico's wireless infrastructure.

“Mexico is still in the early stages of mobile Internet capabilities and adoption, but customer demand for it is growing rapidly,” Stephenson said. “This is an opportunity for us to provide Iusacell the financial resources, scale and expertise to accelerate the roll-out of world-class mobile Internet speeds and quality in Mexico, like we have in the United States.”

But first, the deal is pending review by Mexico’s telecom regulator IFT (Instituto Federal de Telecomunicaciones) and Mexico’s National Foreign Investments Commission.

AT&T also noted the acquisition first requires Iusacell's current partial owner, Grupo Salinas, to close its intended purchase of the other 50 percent of Iusacell that Grupo Salinas does not already own.

The transaction is expected to close during the first quarter of 2015. If everything goes to plan, Iusacell will continue to be headquartered in Mexico City after the deal closes.