Telefonica and AT&T sign Mexico mobile access deal

Telefonica Mexico has announced an agreement to access AT&T’s mobile infrastructure in Mexico with a view to improving the efficiency and quality of its network in the country on a long-term basis. The deal means Telefonica can immediately use AT&T’s last-mile wireless equipment to gain capacity on AT&T’s 3G and 4G network and any future access network technologies nationwide. Telefonica said it would maintain its transport network and all of its platforms, without operational or geographical restrictions, to meet the needs of Movistar users in the country.

In a statement, Telefonica was keen to emphasise that AT&T will have no visibility or influence on the company’s operations and that it will be retaining sole control over its client portfolio, assets, administration, pricing and billing systems. The migration of Telefonica Movistar traffic to the AT&T access network will begin straight away and will be rolled out gradually in the coming months. No financial terms were disclosed but Telefonica said it expects to see savings of EUR 230 million per year, as well as a reduction in net debt of EUR 500 million, after a three-year transition period.

Telefonica also said the deal will allow it to better compete with dominant operator America Movil, whose Telcel unit accounted for around 63 percent of mobile lines in Mexico at the end of March, according to recently-published data from telecom regulator IFT. "This wireless capacity agreement favours competition in the sector, by allowing better resource allocation to connect more Mexicans and strengthens the capacity to continue competing in a market dominated by a preponderant agent," said Telefonica.