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AT&T Sets its Sights on a Second Cellular Network in Mexico

by Sean P. Aune | January 26, 2015January 26, 2015 12:00 pm PDT

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AT&T to Acquire Nextel Mexico

DALLAS, Jan. 26, 2015 — AT&T has entered into an agreement with NII Holdings, Inc. to acquire its wireless business in Mexico for US$1.875 billion, less the outstanding net debt of the business at closing, in a transaction pursuant to Section 363 of the U.S. Bankruptcy Code. Under terms of the agreement, AT&T will acquire companies, which operate under the name Nextel Mexico, holding all of NII’s wireless properties in Mexico, including spectrum licenses, network assets, retail stores and approximately 3 million subscribers.

Nextel Mexico’s network covers approximately 76 million people. The acquisition of Nextel Mexico will support AT&T’s plans to bring greater competition and faster mobile Internet speeds to the Mexican wireless market. AT&T plans to create the first-ever North American Mobile Service area covering over 400 million consumers and businesses in Mexico and the United States, and Nextel Mexico’s subscribers will be included.

Combining Nextel Mexico with Iusacell will allow AT&T to more quickly improve and expand its mobile Internet service to the benefit of millions of Mexicans, particularly those who live outside major metropolitan areas, than it could otherwise do without the transaction. The transaction is subject to a bankruptcy auction and approvals by the U.S. Bankruptcy Court for the Southern District of New York, which is overseeing the restructuring of NII Holdings. The transaction is also subject to regulatory approval by Mexico’s telecom regulator IFT (Instituto Federal de Telecomunicaciones).

Based on its recent positive experience with Mexico’s focused regulatory review and approval process, AT&T expects the transaction to close in mid- 2015.

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AT&T announced today that it has agreed to acquire a second carrier in Mexico in its efforts to expand its foot print even further.

Having already announced its purchase of Iusacell, AT&T is now also acquiring Nextel Mexico for $1.875 billion. The deal will close sometime in mid-2015 and will cover all of the Mexican carriers network, spectrum, retail stores and 3 million subscribers. While the subscriber base may now seem that large, the carrier’s network is said to cover approximately 76 million people.

AT&T said in its statement that it feels the purchases of Iusacell and Nextel Mexico will allow it to expand into Mexico quickly and create the first-ever North American Mobile Service Area that will cover over 400 million potential customers.

The deal is still pending the approval of the IFT (Instituto Federal de Telecomunicaciones) and the U.S. Bankruptcy Court for the Southern District of New York, which is overseeing the bankruptcy auction of NII Holdings, the parent company of Nextel Mexico.

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Sean P. Aune

Sean P. Aune has been a professional technology blogger since July 2007, but his love of tech dates back to at least 1976 when his parents bought...

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