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AT&T is buying Mexico’s Iusacell, but don’t bet on in it creating a carrier without borders

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AT&T is buying Mexican mobile operator Iusacell for $2.5 billion, in a deal AT&T claimed would create a true pan-North American operator.

[company]Iusacell[/company] is the third largest carrier in Mexico, but with only 8.6 million subscribers it’s still dwarfed by [company]América Móvil[/company]’s Telcel, which has about three-quarters of the country’s mobile subscribers. [company]AT&T[/company] used to own a stake in América Móvil, but it sold it for $6 billion earlier this year, apparently clearing the way for the Iusacell deal in the process. Iusacell may not be huge, but its networks cover 70 percent of Mexico’s population, giving AT&T a lot more room to grow.

“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,” AT&T chairman and CEO Randall Stephenson said in a statement. “It won’t matter which country you’re in or which country you’re calling – it will all be one network, one customer experience.”

That’s big talk, but I seriously doubt a combined AT&T-Iusacell will live up to Stephenson’s rhetoric. Multi-national carriers abound in this world, but none of them offer anything close to a service plan that knows no borders. For all the years [company]Deutsche Telekom[/company] owned [company]T-Mobile US[/company], you were never able to step off a plane in Berlin and connect to its network at the same rates you paid while wandering the streets of Seattle. América Móvil has long run Tracfone in the U.S., and while it certainly offers plans that make calling across borders cheaper, it’s never offered a truly unified international service plan.

If AT&T is seriously trying to create a unified network that would tie Mexico and the U.S. into a single footprint then more power to it. But I suspect, AT&T isn’t so much expanding its footprint so much as its expanding its financial interests into Mexico.

One Response to “AT&T is buying Mexico’s Iusacell, but don’t bet on in it creating a carrier without borders”

  1. Humberto Saabedra

    The reason DT never considered cross-country US roaming was due to incompatibilities in network infrastructure that continued into the late rollout of 3G service, so they never bothered with trying to tie the US division into their European marketing or a Vodafone-style roaming scheme. AT&T won’t have this problem with integrating Iusacell’s network because both use the same key frequencies.

    Cross border roaming is already being done on a smaller scale, as Tracfone MVNO Telcel America offers service on T-Mobile in the US and gives customers 1000 voice minutes for roaming with 1GB of data in Mexico on Telcel’s network for $60 a month and it works without a problem despite being prepaid.