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AT&T to Acquire Mexican Wireless Provider, Iusacell

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USA based AT&T has announced that it is paying USD2.5 billion for the Mexican mobile network operator, Iusacell and plans to offer a single network service covering both countries.

Under the terms of the agreement, AT&T will acquire all of Iusacell's wireless properties, including licenses, network assets, retail stores and approximately 8.6 million subscribers.

The acquisition will occur after Grupo Salinas, the current owner of 50 percent of Iusacell, closes its announced purchase of the other 50 percent of Iusacell that Grupo Salinas does not currently own.

Iusacell offers wireless service under both the Iusacell and Unefón brand names with a network that today covers about 70 percent of Mexico's approximately 120 million people. AT&T plans to expand Iusacell's network to cover millions of additional consumers and businesses in Mexico.

"Our acquisition of Iusacell is a direct result of the reforms put in place by President Peña Nieto to encourage more competition and more investment in Mexico. Those reforms together with the country's strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest," said Randall Stephenson, AT&T chairman and CEO. "Iusacell gives us a unique opportunity to create the first-ever North American Mobile Service area covering over 400 million consumers and businesses in Mexico and the United States. It won't matter which country you're in or which country you're calling - it will all be one network, one customer experience.

Iusacell operates a 3G wireless network based on the global GSM/UMTS technology that AT&T uses in the United States. Iusacell owns between 20 and 25 MHz of 800 MHz spectrum, primarily in the southern half of the country, including Mexico City and Guadalajara, and an average of 39MHz of PCS spectrum nationwide. Iusacell's Total Play business, including the network assets to support pay TV and wireline broadband services will be spun out to Grupo Salinas' existing shareholders prior to AT&T closing its acquisition of Iusacell.

AT&T said Iusacell represents a natural geographic expansion of its wireless footprint into a country with a growing economy that is interdependent with the U.S. economy. This transaction gives AT&T the assets necessary to create a first-ever North American Mobile Service area for U.S. customers calling or visiting Mexico, and Mexican customers calling or visiting the United States.

Iusacell will however continue to be headquartered in Mexico City following the transaction closing.

The companies believe that the synergy potential from the combination would include economies of scale through combined purchasing opportunities; and the sharing of best practices.

The transaction is subject to review by Mexico's telecom regulator IFT (Instituto Federal de Telecomunicaciones) and Mexico's National Foreign Investments Commission. AT&T expects the transaction to close in the first quarter of 2015.

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Tags: at&t  iusacell  Mexico  USA