AT&T Meets Mexico Officials as America Movil Prepares SalePatricia Laya and Scott Moritz
AT&T Inc. Chief Strategy Officer John Stankey met with Mexican telecommunications regulators earlier this month to discuss perspectives on the market as the U.S. phone company eyes potential investments abroad.
Stankey and AT&T’s vice president of international external affairs, Karim Antonio Lesina, met with Federal Telecommunications Institute President Gabriel Contreras and other commissioners on the afternoon of Sept. 4, according to a disclosure published on the regulator’s website. They discussed laws passed earlier this year that seek to ignite investment and spur competition in the heavily concentrated Mexican market, according to the disclosure, which didn’t provide more detail.
AT&T is among the companies that have been contacted by billionaire Carlos Slim’s America Movil SAB, which is seeking to sell part of its network in Mexico, Bloomberg News reported this week, citing people familiar with the matter. America Movil, the nation’s biggest carrier, is planning to sell assets along the east coast of Mexico that could fetch as much as $17.5 billion, said the people, who asked not to be identified because the information is private.
America Movil aims to use the assets to bring a new competitor to Mexico because of the revamped laws, which force the company to cut fees and share infrastructure as long as it controls more than half of Mexico’s mobile and landline users.
Brad Burns, an AT&T spokesman, declined to comment.
AT&T’s planned $48.5 billion acquisition of DirecTV will increase its scale so much that a purchase of America Movil assets wouldn’t have a material effect on the U.S. carrier’s credit profile, Fitch Ratings said in a report today.
At an investor conference yesterday, Stankey said AT&T’s prior experience in Latin America and a shared border with Mexico, along with the revamped telecommunications laws, made the region attractive.
“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,” he said.
America Movil executives including Chief Executive Officer Daniel Hajj met with the regulatory officials five days after Stankey’s visit to discuss the potential asset sale, according to the agency, known as the IFT. An America Movil press official declined to comment on the company’s meeting with the regulator.
If it enters Mexico, AT&T would be competing with a former partner. The company had a minority stake in Mexico City-based America Movil for 24 years -- until this year. AT&T sold the shares to Slim to clear regulatory hurdles for the purchase of DirecTV, which competes with America Movil for TV viewers in Brazil and Colombia.
The satellite-TV company also has a minority stake in Sky Mexico, the nation’s biggest TV provider, giving AT&T a new asset in the market. America Movil doesn’t offer video service in Mexico.
Stankey, who has worked at AT&T and its predecessor companies since 1985, has helped the company expand its business into wireless service for airlines and a video-programming venture called Otter Media to deliver Web-based TV.
During Stankey’s tenure as chief strategy officer, AT&T has also flirted with the idea of investing in Europe. The company studied an acquisition of Vodafone Group Plc last year before backing off in January, declaring in a filing that it wouldn’t make an offer.
One of AT&T’s predecessor companies competed with Slim decades ago. In 1995, AT&T Corp. sought to take on Slim in the long-distance market in a joint venture with Mexican conglomerate Alfa SA. AT&T left that business, Alestra, in 2011.