America Movil SAB shareholders approved a spinoff of as many as 11,000 wireless towers in Mexico, creating Latin America’s second-largest renter of tower space.
The new Telesites company will compete with American Tower Corp., which has more than 8,000 towers in Mexico and more than 32,000 in Latin America, according to TowerXchange. America Movil now uses the towers for itself. Telesites will rent space to the company and other operators under the plan.
America Movil, controlled by billionaire Carlos Slim, is studying how to break apart operations in Mexico, where sanctions are cutting into profit. The company, which controls about 80 percent of landlines and 70 percent of mobile-phones in Mexico, was declared dominant in its industry last year by the federal communications regulator, known as IFT.
Slim holds about two-thirds of voting shares in America Movil. Among the sanctions imposed on the company, it had to eliminate fees it charged other operators to connect to its network.
Mexico estimates it needs about 80,000 radio bases -- a fourfold increase from current levels -- to handle growing demand for mobile capacity. Telesites has significant opportunities for growth, America Movil said in a regulatory filing this month. As part of the IFT’s rules, Telesites, which will mirror America Movil’s capital structure and have a separate administration, must allow access to its network to any operator for a fee. If a fee agreement can’t be reached, the IFT will determine the rate.
America Movil had been adjusting its divestment plan to make assets more attractive to potential suitors, including AT&T Inc., people with knowledge of the matter said in January. Instead, AT&T has agreed to buy competing assets -- NII Holdings Inc.’s Nextel Mexico business and Grupo Iusacell SA.
American Tower, which is based in Boston, has also grown in the Americas. It agreed to buy 6,480 antenna sites in Brazil from Tim Participacoes SA in November. In February, American Tower said it would acquire the rights to more than 11,000 wireless towers for $5 billion from Verizon Communications Inc.