The Mexican subsidiary of Spanish cell carrier Telefonica SA and local carrier Iusacell are joining forces to share mobile networks in a bid to expand coverage.
The companies say the five-year agreement could benefit 27 million subscribers.
The Mexican market is currently dominated by Telcel, which is owned by telecom magnate Carlos Slim, considered the world's richest man.
Telefonica's Mexico brand Movistar has an estimated 22-percent market shares and Iusacell has less than 5 percent of the market. Telcel controls most of the rest.
Iusacell SA said Wednesday it still awaiting final word from regulators on whether they will allow another proposed alliance with the owners of the Televisa television network, who want to buy a 50-percent stake in the firm.