The Mexican telecoms market will develop in much the same way as the U.S., AT&T chief executive Randall Stephenson predicted this week.
The U.S. operator’s operations in Mexico are performing well and will constitute a major part of its growth over the next couple of years, but an aggressive reaction from its major competitor could be on the cards, Stephenson said on a Webcast interview during a UBS event this week.
A key strategy for AT&T in 2016 will be to "keep pushing the footprint," with particular reference to Mexico, Stephenson said. "We’re convinced that the U.S. is going to replicate itself in Mexico."
AT&T landed in the Mexican mobile market thanks to the acquisitions of Iusacell and Nextel earlier this year. It has launched some cross-border offers and is rolling out an LTE network that will reach 40 million people by the end of this year and 100 million in three years.
"It is proving to be everything we had hoped and more," Stephenson said. He explained that AT&T is introducing its own brand in Mexico on a market-by-market basis, at the same time as it launches LTE services.
"The demand for the AT&T brand is really high," said Stephenson. "The AT&T brand in Mexico is an aspirational brand."
The U.S. telco’s Mexican business is recording good growth in terms of both postpaid and prepaid subscriptions.
"I think we’re going to surprise a lot of people with our Mexico results in the fourth quarter," Stephenson said. "It tells you the appetite there is for a competitive alternative in Mexico."
That said, the operator faces formidable competition from Carlos Slim’s America Movil, and the market leader is doubtless keen to protect its position.
"I do not expect Carlos is just going to lay down and allow us to take share," Stephenson said. "I know this guy. He’s going to be very aggressive."
When it comes to investment in Mexico, Stephenson was keen to emphasise that he views the country as an extension of his core U.S. business, rather than as a new market; effectively AT&T is extending its LTE network into Mexico, not rolling out a new network there.
"Think of Mexico as another state of the United States," he said.
The pricing and the look and feel of mobile offers will look similar across the two markets, and over the next year AT&T will roll out more shared value plans.
"[Mexico] is going to be a major part of our growth for the next couple of years," Stephenson said.
