America Movil said plans to spin off its mobile towers into a new company are at an advanced stage and could be completed in May or June this year.
CEO Daniel Hajj said during a conference call on Wednesday this week that the plan should be presented to shareholders in April, according to various press report.
Reuters reported that the Mexico-based company said it is also in talks with the country’s telecoms regulator over whether the new company would be considered preponderant in the market and subject to tougher regulations.
The new company is expected to have around 11,000 sites and compete with the likes of American Tower, which analysts at Itau BBA estimate has around 8,400 towers in Mexico, Reuters added.
America Movil, which is Latin America’s biggest telco, pledged last year to separa te its towers, base stations and passive infrastructure into a new business unit and provide access to rival players.
This related to a decision by the company to sell off a portion of its fixed and mobile assets in order to reduce its market share. The move should help it to avoid new regulations designed to rein in dominant players and boost competition, as well as aiding it in its quest to get the regulatory green light to offer pay TV services.
Reuters noted that America Movil provided few new details about its planned asset sale on Wednesday’s call, saying it was still working on the process.
In October last year, Mexico’s telecoms regulator revealed that America Movil had not yet submitted its plans to sell off assets and has also made it clear that any prospective buyer would have to jump through a number of hoops to prove that it is wholly independent from the seller.
Mexico’s parliament is in the process of passing new legislation aimed at increasing competition in the country’s telecoms and TV sectors. Watchdog Ifetel in March 2014 declared America Movil a ‘preponderant economic agent’ after it found Telcel and Telmex enjoyed market shares of 70% and 80% respectively, comfortably exceeding its threshold of 50%.
