Facing AT&T, America Movil pledges free roaming, $6 billion network upgrade

Reuters News
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Posted: Jul 16, 2015 3:22 PM

By Christine Murray

MEXICO CITY (Reuters) - Mexican telecoms giant America Movil, controlled by billionaire Carlos Slim, will respond to a challenge from U.S. carrier AT&T by offering some subscribers free calls to and data in the United States, and will also invest $6 billion in its network in Mexico, its chief executive said on Thursday.

AT&T Inc has challenged America Movil on its home turf with the purchases of two Mexican wireless operators. America Movil Chief Executive Officer Daniel Hajj said the company would eliminate roaming charges from Mexico to the United States for post-pay customers who opt to pay an extra 50 pesos ($3.16) per month.

The company hopes to do the same for prepay customers, which make up more than 80 percent of its Mexico subscriber base, and extend the deal to cover Canada, he told a news conference in Mexico City.

Rivals AT&T, Telefonica SA and T-Mobile US Inc have all also introduced new packages with free calls between Mexico and the U.S. this year.

The $6 billion would be invested in Mexico over the next three years, Hajj said.

That figure is double the $3 billion AT&T pledged in Mexico investment in June, though the U.S. carrier has just 6 million Mexico subscribers, less than one tenth of America Movil's 72 million.

America Movil was still looking at how to sell some assets but was in no rush, Hajj noted. America Movil is set to report its second-quarter results later on Thursday.

The company said in July last year that it would sell assets in Mexico to cut its market share and avoid tough new measures imposed under a sweeping telecom reform aimed at curbing America Movil's dominance.

In April, America Movil said it was reviewing the original plan to sell a cross-section of the company. It cited AT&T's purchase of Mexico's No. 3 and No. 4 wireless operators, which could increase competition.

At the time, Hajj said the company no longer wanted to sell infrastructure, a share of its frequencies, or spectrum.

(Editing by Lisa Shumaker and David Gregorio)