AT&T Expects Acquisition of Nextel Mexico Soon



AT&T’s acquisitions in Mexican wireless space

AT&T (T) recently gave guidance on its anticipated completion of the acquisition of NII Holdings’ Nextel Mexico, a Mexican wireless provider. AT&T also talked about its completed acquisition of Iusacell, another Mexican wireless provider, in 1Q15.

According to AT&T’s chief executive officer and chairman, Randall Stephenson, in the company’s 1Q15 earnings call on April 22, “We established a good foothold in the Mexican wireless market with our acquisition of Iusacell and we are on track to close our acquisition of Nextel’s Mexico operations shortly.”

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AT&T–Nextel Mexico transaction

AT&T and NII Holdings signed the agreement for Nextel Mexico in January 2015. This is a $1.875 billion deal.

At the end of 2014, Nextel Mexico had ~2.9 million wireless subscribers. The Nextel Mexico segment generated annual revenue of ~$1.42 billion for NII Holdings in 2014. According to AT&T, the deal has the green light from the bankruptcy court.

AT&T-Iusacell transaction

AT&T bought Iusacell for ~$2.5 billion in 1Q15. According to AT&T, Iusacell had a wireless coverage of ~70% in Mexico as of January 16, 2015.

The deal was signed in November 2014. AT&T reported Iusacell’s results under its international segment category in 1Q15. Iusacell generated revenue of ~$236 million during the quarter. It had ~6 million subscribers at the end of 1Q15.

Instead of directly investing in the stock, you may take a diversified exposure to AT&T by investing in the Technology Select Sector SPDR Fund (XLK). The ETF held ~4.2% in the carrier as of March 31, 2015.

The iShares MSCI ACWI ETF (ACWI) had holdings of ~0.4% in AT&T on March 31. Verizon (VZ) makes up ~0.5% of ACWI, and Sprint (S) makes up ~0.01%.


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