Less than two weeks after closing the deal to acquire Mexican wireless provider Iusacell, AT&T has revealed its next move in Mexico: It has entered into an agreement to buy wireless company Nextel Mexico from NII Holdings.
NII Holdings provides mobile communications services under the Nextel brand in Mexico, Argentina, and Brazil, though it recently filed for bankruptcy protection following poor financial performances.
Now, AT&T has agreed to acquire the Nextel business in Mexico for $1.875 billion, minus any outstanding debt, including “spectrum licenses, network assets, retail stores and approximately 3 million subscribers,” according to a press release.
The Nextel Mexico network covers almost 80 million people in Mexico — or two-thirds of the country’s population — so there is scope for AT&T to grow Nextel’s subscriber base significantly beyond 3 million with the right investment. Following so soon after its Iusacell acquisition, this will better equip AT&T to expand its mobile Internet offerings to many millions across the country.
This all feeds into AT&T’s broader plan to build an all-encompassing mobile service in North America, covering Mexico and the United States. Indeed, just last week, news emerged that AT&T was introducing unlimited calling from the U.S. to any number in Mexico for no additional charges.
Nextel Mexico was the country’s fifth most popular network in terms of subscriber numbers, after Telcel, American Movistar, Iusacell, and Unefone. Now AT&T has added Nextel to its arsenal, this will effectively cement its position as the third-largest network in Mexico, as was already the case with Iusacell.
It’s worth noting here that AT&T sold its stake in America Movil for $5.6 billion last year, to a company controlled by billionaire Carlos Slim. AT&T sold up in order to gain regulatory approval for its DirecTV purchase.
The Nextel Mexico deal is still subject to the usual regulatory approvals as well as approval by a U.S. Bankruptcy Court in New York, which is “overseeing” NII Holdings’ restructuring.