Telefónica Mexico Chooses Tutela for Mobile Network Analysis

Canadian mobile analytics company Tutela Technologies has announced an agreement to help Telefónica Mexico improve its network quality. The partnership will give Telefónica Mexico access to quality crowd-sourced network data from over 150,000 Mexican mobile phone users, including details of signal strength and quality, device usage and download speed patterns.
 
The insights will enable the operator to analyze the experience of its own and rival networks, identify opportunities for improvement and troubleshoot performance problems as they arise, according to Tutela, which said that it collects over 10 billion mobile quality data points every day globally, with over 100 million data points per day in Mexico alone.
 
Spain-based multinational Telefónica, operating in Mexico under the Movistar brand, has experienced a difficult time in Mexico since entering the market over a decade and a half ago. While Movistar is number two in the market in terms of subscribers, it lags far behind the leader, América Móvil -owned Telcel, with 25 million subscribers to Telcel’s 75 million as of the first quarter of 2017. Furthermore, Movistar is facing a major challenge from new entrant AT&T, which has over 12 million subscribers and is growing fast. Telcel has also become a more aggressive competitor lately, ever since national regulators imposed measures to reduce its market dominance. As for Movistar, it has seen revenues drop more than 16 percent year-over-year, with subscriber numbers flat.
 
In Open Signal’s March 2017 tests of Mexican mobile networks, Movistar came in last of the top three operators, with Telcel leading in 4G/LTE and AT&T taking the lead for combined 3G and 4G quality. Movistar won in no categories. With these facts in mind, it seems that boosting network quality would be a very good strategic move for Movistar.
 
By partnering with Tutela, Telefónica Mexico will be engaging the services of a well-reputed firm with the ability to garner the high-quality, meaningful data that the operator will need in order to chart a course forward for its network. Granular data that pinpoints exactly where and how the network is not delivering what customers want will be essential, and comparative data about rival operators’ networks will likewise be indispensible.
 
While rumors have gone around in the media to the effect that Telefónica has been considering exiting the Mexican market in the wake of AT&T’s advent, the effort to seriously address its network concerns is an indicator that, at least for now, Telefónica is staying put.


Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. 

To learn more about Tarifica, please visit www.tarifica.com 

Telefónica, Telesites Said to Be Negotiating Mexico Tower Deal

Telefónica—operating in Mexico as Movistar—is discussing the possibility of renting mobile phone towers from Telesites, the recently spun-off towers business of América Móvil, according to unnamed sources cited by Bloomberg. Its aim in doing so would be to gain access to Mexico’s most widespread network of around 10,800 towers, enabling it to offer faster services and lowering the costs of improving coverage, according to the sources. Telefónica’s chief operating officer, Jose Maria Alvarez-Pallete, recently said the company was prepared to reach network sharing deals with rivals such as AT&T (which owns Iusacell and Nextel) and América Móvil in order to boost its performance in Mexico. Last year, América Móvil, having been declared “dominant” by the Mexican regulator, agreed to sell off assets in order to bring its share of the mobile market under 50 percent. Spinning off its tower business into a new entity, Telesites, will not in and of itself accomplish the goal of reducing dominance. In April, CEO Daniel Hajj said, “We are interested in divesting and reducing our market share but we do not know exactly how we want to do it.” In the meantime, renting out some of its very substantial infrastructure is a way for América Móvil to drive revenue while waiting to see how the rapidly changing Mexican market will shake out. As for Telefónica, Alvarez-Pallete said last week, “We can’t intend to grow in Mexico without having a good network and we are light-years away from it. So, what has to be expected from us in Mexico is strong investments, and potentially agreements to access towers or for combined creation of infrastructure.” Sharing of network resources among rival operators has often been shown to be a win-win situation, and in the Mexican market, where there is a great to need to improve coverage over vast areas, sharing is particularly desirable. AT&T, in its quest to become the first cross-border service provider in North America, is also reportedly working on an agreement to rent towers from Telesites.

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AT&T Completes Nextel Purchase for US $1.875 Billion

U.S. operator AT&T has closed its acquisition of NII Holdings’ Nextel Mexico business for US $1.875 billion, after the deal was approved by Mexico’s regulator IFT and the U.S. Bankruptcy Court for the Southern District of New York, which is overseeing the restructuring of NII Holdings, after its bankruptcy filing in 2014. The acquisition excludes around US $427 million of net debt and other adjustments. The deal marks AT&T’s second purchase of a Mexican mobile operator this year; the first was Iusacell, which was acquired for US $2.5 billion in January. In the present deal, AT&T acquired all the companies operating under the name Nextel, along with their spectrum licenses, network assets, retail stores and subscribers, and AT&T said it will now integrate Iusacell and Nextel into a single operator.

In addition, AT&T confirmed plans to create what it described as the first-ever North American mobile service area, which will cover more than 400 million customers and businesses in Mexico and the U.S. The CEO of AT&T Mexico LLC and Iusacell, Thaddeus Arroyo, will lead the combined company.

After AT&T bought Iusacell and was looking to increase its position in Mexico, it faced the choice of whether to buy Nextel or to pick up those assets that América Móvil was planning to sell off. At the time we wrote that the Nextel option had the benefits of lower cost and fewer regulatory issues. As it happened, América Móvil has still not carried out the divestment that was supposed to take it below the 50 percent market share required to satisfy Mexican regulators. But AT&T has moved ahead with an acquisition that adds a significant amount of both infrastructure and customers, and the regulatory headwinds anticipated due to the deal’s status as a bankruptcy sale have turned out not to be a problem. The deal, announced in late January, took only a little over three months to close.

Nextel has around 3 million customers, and its network serves some 76 million people in a nation of 120 million. It controls 25 MHz of spectrum in the 800 MHz band and 30 MHz in the 1.7/2.1 GHz band. With this infrastructure, added to that of Iusacell, which has 70 percent coverage and 8.6 million customers, AT&T will significantly improve its ability to compete and perhaps even to achieve the top spot in the Mexican market. Just as importantly if not more so, the enlarged network capacity and coverage enable the U.S. operator to realize its vision of a combined service region extending across the U.S.-Mexico border. With over 30 million people of Mexican origin residing in the U.S., the market for communication with Mexico is very large—and, of course, rapidly growing. Whether or not the figure of 400 million customers is too high, a unified North American service area stands to win the AT&T/Iusacell/Nextel entity a bonanza of customers and potentially huge revenues from mobile traffic.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. Click here to contact a Tarifica Analyst

América Móvil Not Selling Frequencies or Infrastructure

Mexican mobile operator América Móvil has no plans to sell frequencies or infrastructure to reduce its dominant position in the country’s market, CEO Daniel Hajj told investors in a conference call. Hajj also said that the operator will analyze the new configuration of the Mexican telecom market with the entry of U.S. operator AT&T with the announced its acquisition of operators Iusacell and Nextel. “We’re reviewing exactly how the market is going to be in Mexico and then we’re going to decide what we’re going to sell to reduce our market share in order to avoid being a preponderant player,” Hajj said. “We are interested in divesting and reducing our market share but we do not know exactly how we want to do it.” On 17 April, shareholders of América Móvil approved the company’s plans to spin off some of its mobile infrastructure in Mexico into the new company Telesites, which would be listed separately on the stock market.

In July, América Móvil announced that it would break up its assets in order to bring its market share below the 50 percent level required by Mexican regulator to avoid a ruling of dominance. However, since then it has not presented a concrete plan to achieve that. Spinning off infrastructure into a separately listed company will not in itself reduce dominance, and Hajj’s remarks show that the company is still quite far from deciding how to proceed in Mexico’s new regulatory climate. This wait-and-see approach is understandable in light of the current uncertainty as to how AT&T’s acquisitions will play out in the marketplace. 

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.

Tarifica is a division of T3i Group, a diversified telecom information provider. To learn more about Tarifica, please visit www.tarifica.com. 

Global Trend: OTT Services Taking Away Market Share

Mobile subscribers in Argentina sent a total of 10.11 billion SMS during February 2015, down 7.2 percent compared to the same months the previous year, according to the national statistics bureau Indec. Compared to the previous month, the number of sent SMS decreased 11.1 percent. This is an example of the global trend, visible in both developing and developed markets, of free or very low-cost OTT services taking market share away from mobile operators’ SMS offerings.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. Tarifica is a division of T3i Group, a diversified telecom information provider. To learn more about Tarifica, please visit www.tarifica.com.

AT&T to Acquire Nextel Mexico for US $1.875 Billion

U.S. operator AT&T is continuing its expansion to Mexico with an agreement to buy Nextel Mexico for US $1.875 billion. The deal builds on AT&T’s takeover of Iusacell—which was announced in early November 2014—to add another 3 million customers and additional spectrum, retail and network assets. AT&T stated that Nextel’s network, covering some 76 million people, will help it realize its goal of creating a unified North American network spanning the U.S. and Mexico and covering over 400 million people. The acquisition excludes debt associated with Nextel Mexico and is subject to court approval in the bankruptcy proceedings underway in New York for NII Holdings, Nextel’s parent company. NII said a competitive bidding process will need to be held under court supervision, and regulatory approval in Mexico is also needed. The transaction is expected to close by mid-2015.

After the AT&T–Iusacell deal was announced, we wrote that AT&T, in its quest for dominance in the Mexican market, had two options ahead: To buy up the US $17.5 billion worth of assets that América Móvil was selling off, or to buy Nextel. By choosing the latter option, the U.S. giant has accomplished several things. First, clearly, it has spent far less money while still gaining a substantial asset in terms of network. Second, it has placed itself in a more advantageous position with regard to impending regulatory scrutiny, because the size of the América Móvil divestment is so large and would face stiffer headwinds. Third, and most important, if the deal is approved, AT&T will have given itself the reach to surpass Mexico’s number-two operator, Movistar, and potentially challenge top operator América Móvil. Nextel’s network covers 76 million in a nation of 120 million, which will make a major difference in the capacity of the AT&T–Iusacell combined entity to compete in the marketplace. The fact that Nextel is part of a bankruptcy sale is something of a drawback in this deal, but that may be a small price to pay in light of the gigantic cost savings versus acquiring América Móvil’s assets.

AT&T’s ambitions go well beyond dominating the Mexican market; the operator intends to unify its U.S. and Mexican networks and create a transnational integrated market. Considering the vast numbers of Mexican nationals living and working in the U.S. and needing to be in contact with family and friends in Mexico and also to remit money to Mexico, this looks to be a major opportunity for revenue.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx

América Móvil Increases Its Stake in Telekom Austria to Over 50 Percent

América Móvil has announced that it has raised its stake in Telekom Austria to 50.8 percent. Its tender offer of 23.5 percent of the Austrian operator’s shares closed on 10 July, and its payment of €7.15 (US $9.70) per share is due by 24 July. Shareholders who did not tender their shares will have three more months in which to do so. The Austrian government will retain a 25 percent stake in Telekom Austria, under a joint shareholding pact it agreed upon with América Móvil in May. América Móvil, controlled by billionaire Carlos Slim, was declared dominant by Mexican regulators last year. While it is appealing the dominance finding, it seems that América Móvil has accepted that an appeal is very unlikely to succeed. Last week, the Mexican government approved broad regulations aimed at opening up the telecommunications and broadcasting industries. Shortly thereafter, América Móvil announced plans to divest itself of some of its operations in Mexico, which were not specified, in order to bring the company’s share of the Mexican telecommunications market below 50 percent. That could remove its dominant status and allow it to enter the TV sector.   Whether or not it ends up entering that sector, Mexico has clearly become a much less comfortable environment for América Móvil than previously. With opportunities contracting at home, and the size of its business set to contract there as well—at least for now—América Móvil is looking to expand abroad. By increasing its stake past the 50 percent mark, América Móvil will now control Telekom Austria’s management decisions and thus is set to become a player not only in Austria but in other Central and Eastern European countries where Telekom Austria has a presence.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx