Siemens Seeks To Boost Mobile Phone Sales In Mexico

MEXICO CITY -(Dow Jones)- Siemens Mexico said it plans to invest about $15 million to promote its mobile phone brand in Mexico in an effort to raise its share of the market.

The Mexican division of German conglomerate Siemens AG (SI) announced Thursday the creation of a new business unit, Siemens Communications, which incorporates operations in fixed and mobile telephony equipment.

Ulises Tellez, the new unit's head of mobile phones, said at a press conference that the company has an 8% share of cell phone sales in Mexico, and 10.5% in Latin America.

The company plans to introduce production of four new models in early 2005 at its plant in the western city of Guadalajara, which will produce phones for the local market and for export to the U.S. and elsewhere.

Siemens also imports phones into Mexico from Brazil, Hungary and Germany, Tellez added.

According to Mexican telecommunications regulator Cofetel, there were more than 35.6 million mobile phone users in Mexico at the end of the third quarter, up 24.2% from the year-ago period.

Cofetel said tariff competition, the introduction of text messaging and migration to GSM technology offered by the country's two biggest wireless service providers, America Movil SA (AMX) and Spain's Telefonica Moviles SA (TEM), were behind a 46.3% increase in wireless traffic in the quarter.

Tellez estimated that users change their phones every two-and-a-half to three years on average. He added that fashion, particularly demand among young people for phones with color screens and cameras, is driving growth in the market.

He said Siemens more than doubled its mobile phone sales in Mexico this year from 2003, while the local market is growing about 10% to 12% a year.

Siemens, which sells phones for the GSM services offered by America Movil unit Telcel and Telefonica's Movistar, is among a dozen suppliers competing in the market, among them Nokia (NOK), Sony-Ericsson, Motorola (MOT), and Samsung.

-By Anthony Harrup, Dow Jones Newswires; (5255) 5080-3450, anthony.harrup@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 3rd December 2004