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For sale: Mexican wholesale mobile network

Monday, July 6, 2015

Want to buy a wholesale national mobile broadband network in Mexico?

Being a start-up, it would be risky.

An effective wholesale market doesn’t yet exist.

In addition, a buyer would be competing with America Movil, which dominates Mexican mobile operations, with a share of more than 60%.

On the other hand, a wholesaler could potentially find a market among thousands of mid-size and specialty providers of mobile services.

Meanwhile, Mexico’s telecom sector has looked attractive to at least one major investor.

United States-based AT&T last January acquired local wireless provider Iusacell (only Spanish) - Mexico’s third-biggest wireless provider - for $2.5 billion, as well as Nextel (only Spanish) for $1.9 billion.

The buyer of a wholesale national mobile broadband network would have the right to use to state-owned equipment, including transmission towers and fiber-optic cable, along with the right to use frequencies in the 700 MHz range.

Rumored buyers include international companies Alcatel-Lucent, China Telecommunications Corporation, and Ericsson, as well as Totalplay Telecomunicaciones, controlled by Mexican conglomerate Grupo Salinas.

The price is reportedly $7 billion, down from $10 billion when the project was proposed in 2013.

But the cost could go down, with no buyer yet confirmed, and with a peso, which is worth 23% less than 12 months ago.