As many as half a million people a day cross the border between the U.S. and Mexico, according to U.S. government statistics.
More than 173 million people made the crossing either as pedestrians or as car, bus or rail passengers in 2014, figures from the United States Department of Transportation show. And that’s not including millions of commercial vehicles or the unknown number that jumped the fence.
It is perhaps surprising then that it took this long for telecoms operators in the two countries to start thinking about cross-border services.
America Movil was the latest to make the move. The Mexican incumbent on Thursday unveiled its new ‘Without Borders’ plan that allows users to make calls to the U.S. at l ocal rates and to use their bundled voice minutes, SMS and data while roaming in the U.S.
"We will lead the integration of the Mexico and U.S.A. telecoms market," America Movil proclaimed in its Q2 results announcement, published the same day.
It conceded that "our main competitor" has the bigger share of that market. Referring to AT&T by name at America Movil is clearly akin to mentioning ‘the Scottish play’ in a U.K. theatre; its Q2 document sticks with "the new player", and the like. However, with a strong and growing customer base of its own, America Movil could give its rival a run for its money going forward.
As it stands, Without Borders is only available to postpaid customers, at an additional cost of 50 pesos (€2.90/US$3.15) per month. At the end of June, America Movil’s domestic mobile customer base stood at 72.63 million, but only 14.5%, or 10.52 million, of those were postpaid users.
However, America Movil CEO Daniel Hajj told a press conference in Mexico City that the firm hopes to extend the offer to prepaid users, Reuters reported. It also plans to include Canada in the deal.
America Movil also operates north of the border via mobile virtual network operator (MVNO) Tracfone, which had 25.71 million customers by mid-year.
That is a relatively small number compared to AT&T’s 82.21 million postpaid and prepaid mobile phone customers as of the end of Q1 – it is due to post Q2 numbers next week – but by the same token, AT&T’s Mexican mobile customer base is a drop in the ocean compared with America Movil’s; the U.S. telco reported having 5.99 million wireless customers in Mexico at the end of March.
Having completed the acquisitions of Iusacell and Nextel Mexico in the past six months, AT&T arguably has a stronger platform for growth than America Movil. It is working on new tariff plans that will enable Mexican customers to use their home service plans while in the U.S. as part of its creation of a single North American service area.
But it is not out of the question that the Mexican firm will seek to expand its U.S. presence.
The company has scope for organic growth, given the sizeable Mexican population in the U.S. In addition, consolidation in the country’s telecoms market is not yet over, and while America Movil is not one of the companies that has been frequently linked with T-Mobile US, for example, it is never wise to rule anything out in this industry.
T-Mobile itself also has half an eye on its neighbouring markets. The operator presented ‘Mobile Without Borders’ last week, a plan that extends free roaming to Canada and Mexico.
"After spending billions buying up Mexican telecoms, AT&T’s CEO is promising ‘the first seamless network covering Mexico and the U.S.,’ something ‘unique’ that ‘nobody else will be able to do for the consumer’," said T-Mobile US CEO John Legere, at the time.
"So much for that. They won’t be the first. And they won’t offer Canada for free," he insisted.
History clearly indicates that Legere has no problem letting the name of AT&T pass his lips, even though he does frequently default to a less flattering moniker.
He’d probably happily shout "Macbeth!" in the Old Vic too…
