Purchasing Grupo Iusacell for $2.5 billion on Friday, 7th November, 2014, was a move that AT&T Inc (NYSE:T) made in order to establish itself as the creator of ‘mobile service area’ in North American continent. Having acquired this company from Ricardo Salinas Pliego, a billionaire in Mexico, the company has gained for itself its debt but also its 8.6 million subscribers, according to CNBC. Iusacell’s widespread network courtesy of being used by 70% of the country’s population is also now that of its buyer.
This move has taken place in the aftermath of Mexican Prime Minister Enrique Pena Nieto having passed several reforms intended to revamp the telecommunication space in the country. Much of the reformation process has been to curb the bigger players so that smaller companies can get the necessary impetus for growth and the atmosphere built is that of healthy competition.
Interestingly, AT&T Inc (NYSE:T) has recently sold its stake in another Mexican venture named America Movil for the sake of avoiding anti-trust disputes. The buyer in the scenario was another billionaire named Carlos Slim Helu and the deal was sealed at $5.6 billion.
With no closure date for the Iusacell deal in sight, the delay has been attributed to the process of seeking approval from Mexican authorities, without which no further step would be taken. Branding is another issue which needs to be sorted out but it is an aspect that AT&T Inc (NYSE:T) will deal with once the legal turns have been overcome. That said, the company hopes that its subscriber base will improve dramatically once the acquisition is over and more subscribers will join the platform to avail the services.
For Americans, this deal of AT&T Inc (NYSE:T) is advantages personified since it means that every time they travel to Mexico, they will still be within service coverage area and hence can connect back home easily. Charges will also be minimal since the roaming facility will not be required.
This article has been written by Vinita Basu.