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Telefonica Tops America Movil in Mexico Quality Study

Telefonica SA (TEF) beat Carlos Slim’s America Movil SAB on its home turf in a study by the nation’s phone regulator of the quality of Mexico City wireless voice and Internet connections.

Telefonica, based in Madrid, dropped fewer calls and left Internet sessions hanging less frequently than the city’s other three mobile-phone carriers in an evaluation between Jan. 31 and March 1, the Federal Telecommunications Commission, known as Cofetel, said today in a statement. Mexico City-based America Movil was second in 3G voice calls and last in Internet quality.

The results in Mexico’s largest market, representing almost one-fifth of the nation’s population, put more pressure on America Movil to invest to improve its network. Lawmakers are pushing through a plan to increase competition for the carrier, which has 70 percent of Mexico’s mobile-phone lines.

“Telefonica keeps investing in Mexico to achieve better network quality for our clients,” the company said in an e- mailed statement. “Cofetel’s results once again show our commitment to Mexico.”

America Movil budgeted about 32.5 billion pesos ($2.6 billion) last year to improve its Mexican phone networks and acquire more capacity for mobile services. That represented about 12 percent of its Mexico revenue. Telefonica planned to spend 7 billion pesos on Mexican infrastructure last year, or about 25 percent of revenue.

Dropped Calls

In Cofetel’s study, Telefonica dropped 0.27 percent of calls on its second-generation, or 2G, network and 0.34 percent on its 3G network. America Movil’s rates were 1.63 percent and 0.75 percent. Grupo Iusacell SA’s Iusacell service dropped calls 1.43 percent of the time on 2G and 2.18 percent on 3G, while the rates for its Unefon brand were 1.02 percent and 2.96 percent.

Telefonica failed to establish an Internet connection 3.5 percent of the time, compared to 3.33 percent for Iusacell, 3.5 percent for Unefon and 16.5 percent for America Movil. Once an Internet connection was established, it was interrupted 0.17 percent of the time for Telefonica, 2.2 percent for America Movil, 4.83 percent for Iusacell and 6.39 percent for Unefon.

Dan McCosh, a spokesman for Iusacell, declined to comment. America Movil press representatives didn’t immediately respond to e-mail messages. Businesses are closed today in Mexico for a holiday.

Cofetel said the voice study had a 95 percent degree of confidence with a margin of error of 0.965 percent or less. For Internet, the margin of error was 1.365 percent or less.

The study was a first for Cofetel under a plan it established last year to more closely monitor mobile-phone quality. The agency would be replaced under the new telecommunications law, which is awaiting Senate approval after passing the lower house of Congress last week. The new regulator, the Federal Telecommunications Institute, would have the power to fine companies for violating rules governing quality, a power that Cofetel lacks.

To contact the reporter on this story: Crayton Harrison in New York at tharrison5@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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