New York: US telecom giant AT&T announced plans Friday to buy Mexican wireless operator Iusacell for $2.5 billion and use it to create a mobile network spanning the two countries.
The deal gives AT&T an additional 8.6 million subscribers in Mexico, and comes following reforms in the country aimed at boosting competition in the wireless sector.
AT&T said the deal will be completed when Mexican conglomerate Grupo Salinas closes its purchase of the 50 percent of Iusacell it does not already own.
"Our acquisition of Iusacell is a direct result of the reforms put in place by President (Enrique) Pena Nieto to encourage more competition and more investment in Mexico," AT&T chairman and chief executive Randall Stephenson said in a statement.
"Those reforms together with the country`s strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest."
Iusacell offers wireless services under its own name and the Unefon brand with a network that today covers about 70 percent of Mexico`s 120 million people.
AT&T said it plans to expand the network to cover more people in Mexico.
"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," Stephenson said.
"It won`t matter which country you`re in or which country you`re calling -- it will all be one network, one customer experience."
The network would allow US customers visiting Mexico or Mexicans visiting the United States to use the same network without having to change phones or use any special calling codes.
AT&T said it sees growing mobile phone use in Mexico, which lags the rest of Latin America in wireless adoption.
"AT&T expects that as the price to acquire a smartphone continues to decline and the availability of higher-speed mobile networks in Mexico increases, there will be higher smartphone adoption and increased mobile Internet usage," the company said.
Iusacell will continue to be headquartered in Mexico City following the closing.
The deal is subject to regulatory approval in Mexico.
