AT&T To Acquire Iusacell for $2.5 Billion

AT&T Inc., the popular Texas-based telecom network, has reportedly agreed to purchase Iusacell, the Mexican wireless company owned by the Salinas Group for a deal worth $2.5 billion.

Under the terms of the deal, AT&T will take over all licenses, network assets and the 8.6 million subscribers of Iusacell. It will also assume all of Iusacell's debt from Grupo Salinas, which owns 50 percent stake in the Mexican service provider.

The transaction will fall into place only after Grupo Salinas purchases the remaining 50 percent stake in Iusacell from other investors. Once the acquisition is completed, AT&T will become the "first-ever North American Mobile Service area to cover 400 million Mexico & U.S. consumers, businesses."

About 70 percent of Mexico's population subscribes to Iusacell's wireless services. The deal will give AT&T wide access to a previously-untapped market segment.

"Our acquisition of Iusacell is a direct result of the reforms put in place by President Peña Nieto to encourage more competition and more investment in Mexico. Those reforms together with the country's strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest," Randall Stephenson, CEO and chairman of AT&T said in a statement.

"Iusacell gives us a unique opportunity to create the first-ever North American Mobile Service area covering over 400 million consumers and businesses in Mexico and the United States. It won't matter which country you're in or which country you're calling - it will all be one network, one customer experience," Stephenson added.

Stephenson also asserted that even though Mexico is still in the "early stages" of adopting mobile internet and its other avenues, the demand for it is growing at a rapid pace which will make it all the more easier for AT&T to make a profitable move.

 "This is an opportunity for us to provide Iusacell the financial resources, scale and expertise to accelerate the roll-out of world-class mobile Internet speeds and quality in Mexico, like we have in the United States."

While AT&T has strategized plans to make the best out of the deal, the decision to sell Iusacell wasn't an easy one. According to Bloomberg, Salinas had no intention to sell Iusacell but because it had great ambitions for the brand, they sold it.

"Salinas had a very difficult decision to make. He would like nothing more than to continue with the company, but he realizes that to compete with force and take Iusacell where it should be, it needs a company like AT&T," Luis Nino, a spokesman for Salinas, said in a phone interview to Bloomberg.

"AT&T has very interesting plans for this market," Nino added.

"It wants to take advantage of the U.S. and Mexican markets -- they want to take advantage of the synergies they have, the critical purchasing power of a market that size. It will make it a sensational competitor," he said.