AT&amp;T may be packing its bags and preparing to leave Mexico.\n\nBloomberg News reported last week that the U.S. multinational, one of the world’s leading telecommunications companies, is working with financial advisers to find a potential buyer for its Mexican unit.\n\nThough consistently lagging far behind Telcel, AT&amp;T has some 23 million users who would be shifted to whatever entity buys the company, assuming there is in fact a sale. (Moisés Pablo/Cuartoscuro) \n\nDallas-based AT&amp;T is reportedly seeking more than US $2 billion for the deal, according to unidentified sources cited by Bloomberg. The report says the talks are confidential and no final decision has been made. Additionally, there is no guarantee the deal will go through.\n\nAT&amp;T has been in a losing battle for more than a decade with billionaire Carlos Slim’s Telcel, the dominant carrier in Mexico. This, despite telecoms reforms that, according to Bloomberg, had given international companies hope that they could compete with Telcel.\n\nDespite investments of more than US $10 billion in the country, AT&amp;T’s share of the Mexican mobile market has been significantly smaller than Telcel’s, which regularly tops 60%. \n\nThe fact that the sales price reportedly being sought represents just 20% of AT&amp;T’s total investments in Mexico seemingly highlights concerns about regulatory uncertainty in Mexico and the entrenched market dominance enjoyed by Slim’s companies.\n\nRegulatory shifts culminating in the creation this year of the Telecommunications Regulatory Commission increased operational complexity for foreign operators like AT&amp;T, as did the launch of mobile telephone and internet services by the state-owned Federal Electricity Commission in 2022.\n\nAT&amp;T entered the Mexican market in 2014 by paying US $2.5 billion to acquire wireless telecommunications and cellular services company Grupo Iusacell from billionaire Ricardo Salinas. Soon thereafter, the company purchased the Mexican wireless operations of NII Holdings Inc. for nearly $1.9 billion.\n\nThe competition between AT&amp;T and Slim has been testy over the years, Bloomberg reported.\n\nIn 2022, Slim’s América Móvil — the largest wireless provider in Latin America — accused AT&amp;T of interfering with the media giant’s efforts to obtain a television license, leading to “a dispute that escalated into insults.”\n\nIn what was perhaps a foreshadowing of AT&amp;T’s current situation, the U.S. company agreed to sell its stake in the Sky Mexico pay-TV business last year.\n\nIf AT&amp;T’s business in Mexico is sold, the company’s 23 million users would become part of the future buyer, assuming the transaction is approved by the country’s regulators.\n\nTelefonica’s Movistar México may also be up for sale\n\nAT&amp;T isn’t the only telecom group looking to exit Mexico, Bloomberg added. Spain’s Telefónica is also reportedly in talks to sell its Mexican subsidiary Movistar México. \n\nTelefónica’s move is not wholly unexpected. Since 2019, the Spanish telecom giant has opted to lease AT&amp;T’s network rather than continue investing in its own infrastructure. \n\nIf both AT&amp;T and Telefónica exit, the telecom landscape in Mexico could change dramatically, according to Merca 2.0 magazine. \n\nWhile Telcel would remain the dominant operator, other players cited by Merca 2.0 — particularly companies known as Mobile Virtual Network Operators, which don’t own their own infrastructure and rely on third-party networks — could benefit from “a reconfigured ecosystem following the exit of traditional operators.”

In a possible telecom sector shake-up, AT&T may be leaving Mexico

AT&T is reportedly exploring a sale of its Mexican telecommunications operations, seeking over $2 billion for the deal, amid ongoing competition with Telcel and challenges due to regulatory uncertainty and market dominance by Carlos Slim’s América Móvil. Despite over $10 billion in investments, AT&T's market share remains significantly smaller than Telcel's, which regularly exceeds 60%. The potential exit is part of a broader trend in the sector, as Telefónica is also reportedly considering selling its Movistar México unit. Regulatory changes, including the establishment of the Telecommunications Regulatory Commission and the entry of the Federal Electricity Commission into mobile services, have increased operational complexity for foreign operators. If the sale proceeds, AT&T’s 23 million users would be transferred to the buyer. The exit of both AT&T and Telefónica could reshape Mexico’s telecom landscape, potentially benefiting Mobile Virtual Network Operators.