Two big moves by large carriers within a single week will bring big changes to Latin American wireless markets.
AT&T’s announcement that it will acquire Nextel Mexico showed how the U.S.-based carrier plans to expand its operations further in the country after its purchase of Iusacell.
“AT&T announced its intention to implement a ‘one network, two markets’ strategy where Mexico and the United States would be considered one large local area for their mobile services,” Jose Otero, 4G Americas’ director of Latin America and the Caribbean, told RCR Wireless News. “One can expect aggressive investment by AT&T on LTE and the arrival of LTE-A in the Mexican market.”
However, Otero also pointed out that the current spectrum cap in Mexico is 80 megahertz and, with the approval of AT&T’s Nextel acquisition, all three major mobile operators in the country would be close to that cap. “In other words, they wouldn’t be able to participate in any upcoming spectrum allocation process unless the current legal framework on caps is modified,” Otero said.
In Brazil, major consolidation is expected after Portugal Telecom shareholders approved the sale of Brazilian operator Oi’s PT assets to Altice for $8.57 billion. Market observers in Brazil have long speculated that either Oi will buy rival operator TIM Brasil, or TIM will buy Oi. With more available cash, Oi may now be able to make an offer more easily, although TIM’s owner, Telecom Italia, has said that the Brazilian operator is very important to the company.
“Indeed, a consolidation in Brazil’s telecom market is on the short-term horizon,” Marcelo Kawanami, a senior analyst at Pyramid, told RCR Wireless News. “It is hard to predict the consolidation model that will take place due to the many rumors in the market, but a deal involving TIM Brasil and Oi is likely. With the sale of PT’s assets, Oi gains financial leverage, which can accelerate an M&A process involving the company.”
Kawanami also commented on the development of LTE in the 700 MHz in Brazil, since carriers have already invested in deploying LTE in the 2.5 GHz band. “In terms of ROI and investment in LTE expansion, infrastructure-sharing is key,” he said. “An important value proposition of infrastructure-sharing is that it helps mobile operators optimize and minimize capital outlays, allowing operators to maximize their returns on network investment over the operating life of the assets.”
More Latin American news:
BRAZIL – Telecom regulator Anatel gave its prior consent for Telefónica’s acquisition of GVT but set some rules: Both companies have to keep the coverage area of their Internet broadband, fixed telephony and pay-TV services.
MEXICO – Mexican billionaire Carlos Slim raised his share in América Móvil from 28.4% to 28.9%.
CHILE – Nextel Chile has changed hands again. Veintitrés group, which first acquired the carrier from NII Holdings, has sold Nextel to the Novator group.
COLOMBIA – The national spectrum agency said that 7,000 to 10,000 more antennas and towers are needed to meet demand for wireless service.
BRAZIL– Telefónica has selected Amdocs solutions and services for a business support systems transformation project in Brazil. The project spans customer relationship management including self-service, service order management, master enterprise catalog and revenue management.
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