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Telefonica Seeks Opportunities to Expand in Mexico

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Telefonica is reportedly eyeing up acquisitions and partnerships in Mexico as the government eases competition rules to challenge the dominance of America Movil.

Telefonica is said to have held talks with a number of potential partners in the country, where it already has a small mobile network. Most of the talks are said to have been with media companies, as the rival mobile networks are not expected to be willing to cede management control in a merger.

The company currently has a market share of the industry revenue of 12 percent, although it has a customer base market share of 20 percent.

It recently set itself a target of tripling its share of the local market by revenue as it focuses on mobile data services and targeting small business customers.

"It makes perfect sense for Telefonica to boost its presence in Mexico, a market which has great growth potential," Alberto Espelosin, an analyst told Bloomberg News. "The company hasn't done a great job there so far as it's proved to be a highly competitive market."

The market is about to be shaken up to break the dominance of America Movil and increase competition by the smaller networks.

America Movil should see its market share cut from 70% to below 50% by 2018 following the passing of a telecoms reform bill, Javier Lozano, head of the Senate's transport and communications committee recently predicted.

The smaller networks may also benefit from a radio spectrum auction which is expected to take place once the government reclaims block of expiring 2.5Ghz spectrum next year.

On the web: Bloomberg News

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Tags: telefonica  america movil  Mexico