AT&T Strategy Chief Sees Opportunity in Mexico, Latin AmericaScott Moritz
AT&T Inc. Chief Strategy Officer John Stankey said Mexico is poised for investment, and that he sees a lot of options, both near-term and long-term, in Latin America.
Stankey’s comments at an investor conference were the clearest sign yet that the largest U.S. phone-service provider is interested in expansion into Mexico, where America Movil SAB plans to sell assets to invite a new competitor into the market. AT&T has also looked at Europe for potential investments, Stankey said. He didn’t mention any specific plans to expand in either region.
America Movil has contacted AT&T and other potential suitors such as SoftBank Corp. as it prepares to sell assets along the east coast of Mexico that could fetch as much as $17.5 billion, Bloomberg News reported yesterday, citing people with knowledge of the matter.
“If we weren’t looking at Mexico and Latin America more broadly and thinking about what opportunities there were to further shareholder returns down there, and begin to diversify our revenue sources, I think we’d be asleep at the wheel,” Stankey said. “So yeah, we are intrigued by it.”
Stankey said AT&T’s prior experience in Latin America and a shared border with Mexico and reforms in the region made the option particularly attractive. The company owned a minority stake in America Movil until this year.
“If you step back and think about Mexico, it’s the place that’s prone to move into an incredible growth cycle,” Stankey said, speaking at the Bank of America/Merrill Lynch Media, Communications & Entertainment Conference yesterday.
America Movil’s assets would give AT&T another foothold in Latin America, as it works to close its acquisition of DirecTV. The satellite-TV company has operations in Latin America including a stake in Sky Mexico, the nation’s biggest TV provider. Dallas-based AT&T currently operates almost entirely in the U.S.
While AT&T may now be interested in assets being sold by America Movil, the U.S. carrier divested its stake in the Mexico City-based company earlier this year to help gain regulatory approval for its acquisition of DirecTV.
America Movil, Latin America’s largest phone company, is selling the Mexican assets to reduce its market share in the country’s wireless and landline industries. The move would help it avoid tougher restrictions under new telecommunications laws meant to foster more competition.