In an effort to expand its coverage beyond the US, AT&T has announced that it has agreed to buy Mexican carrier Iusacell in a deal worth $2.5 billion (debt included). The purchase will see the Dallas-based telecommunications provider acquiring all of Iusacell's wireless properties, including licenses, network assets, retail stores, and approximately 8.6 million subscribers.
"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", said Randall Stephenson, AT&T chairman and CEO. "Those reforms together with the country's strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest".
Iusacell operates a 3G wireless network based on the same GSM technology that AT&T uses in the United States, covering about 70 percent of Mexico's 120 million citizens. The purchase will create what AT&T is calling the "first-ever North American Mobile Service area" covering 400 million consumers and businesses in Mexico and the United States.
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 it does not own today.
Although it isn't yet clear whether Iusacell will be rebranded post acquisition, AT&T says the Mexican carrier will continue to be headquartered in Mexico City after the transaction is complete, which it expects to happen in the first quarter of 2015, following approval from Mexico's telecom regulator IFT (Instituto Federal de Telecomunicaciones) and the National Foreign Investments Commission.
The news comes a few months after AT&T announced that it will acquire the satellite television operator DirecTV for $48.5 billion in a deal the company said would bolster its ability to offer video content across multiple platforms.