AT&T Begins Rebranding in Mexico

Renaming of Iusacell and Nextel stores to start by the end of the year, CEO says

MEXICO CITY—Months after acquiring two Mexican mobile-phone companies for around $4.4 billion, U.S. telecommunications giant AT&T Inc. is beginning to rebrand its services in the country, a process that should take through the end of next year, company officials said Monday.

AT&T bought Grupo Iusacell and NII Holdings Inc. unit Nextel Mexico following changes in Mexican laws and regulations that gave rivals advantage to compete against dominant carrier América Móvil, such as zero charges to complete calls on the América Móvil network.

AT&T launched several new plans on Monday under the AT&T brand and will begin renaming Iusacell and Nextel stores by the end of the year in a process that is expected to be completed by the end of 2016, AT&T Mexico Chief Executive Thaddeus Arroyo said at a news conference.

The U.S. giant’s strategy for Mexico includes leveraging its U.S. network, which it will expand into a North American mobile service area of 400 million potential consumers.

A first move was to allow Mexican customers to use their individual plans for voice, data and messaging while in the U.S. with no added charge, and to call friends and family in the U.S. who are on the AT&T network.

That led rivals to offer competing plans. América Móvil has a “without borders” plan eliminating roaming and long-distance charges to-and-from the U.S., while T-Mobile US Inc.also dropped extra charges for calls and texts to and from Mexico and Canada.

“Many of the plans you’re seeing now, when did they arrive? They arrived when we came to bring more competition,” Mr. Arroyo said.

He also defended the dominance regulations to which América Móvil is subjected. “Things haven’t changed a lot. We are here to change it. We have less than 9% of the market, 68% of the market is still totally in one company. So the asymmetric rules are necessary.”

Following AT&T’s recent announcement that it plans to invest an additional $3 billion in Mexico through 2018 to expand its high-speed mobile broadband coverage to 100 million people, América Móvil said it intends to invest $6 billion in the next three years in its mobile and fixed-line networks.

After cleaning up its customer base in Mexico, AT&T ended with eight million subscribers, Mr. Arroyo said, but declined to provide estimates for subscriber growth. América Móvil had 72.6 million wireless subscribers at the end of June, and Spain’sTelefónica, which has also benefited from the asymmetric regulations, had 23 million, a 14% increase from a year before.

While gradually moving the Nextel and Iusacell brands to AT&T premium services, the U.S. company intends to keep the Unefon brand, which was part of Iusacell, for low-end prepaid users.