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Mexico's America Movil Launches 3G Broadband Network

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MEXICO CITY (Dow Jones) Mexico's largest wireless provider America Movil launched its new third generation broadband wireless network Monday in 15 cities, with expectations that the service will become profitable by the end of the year.

"We're investing a very strong amount to get the network off the ground, but we believe it will yield returns in coming months or by the end of the year, when we have sufficient coverage," said Marcos Linares, head of marketing at America Movil's Mexican unit, Telcel.

At a press conference, company officials said they expect the third-generation, or 3G, network to expand its coverage to 350 Mexican cities by the end of the year.

America Movil is Mexico's biggest wireless service provider, with 50 million subscribers. The company plans to invest $4 billion a year over the next three years to upgrade its network to 3G across Latin America.

The network's new features include broadband Internet, video phone-call capability and streaming Internet video, as well as an online music store with more than 200,000 songs.

Officials said 3G is fully compatible with the existing Telcel network, allowing users to switch back to the network when they leave areas of 3G coverage.

Mobile phone penetration in Mexico is currently around 65% and is expected to reach 80% in coming years, officials said.

Telcel said earlier this month that it selected Ericsson to supply the network, including base stations, network controllers and software.

-By Paul Kiernan, Dow Jones Newswires; (52-55) 5080-3451; paul.kiernan@dowjones.com

(END) Dow Jones Newswires

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Tags: america movil  telcel  Mexico