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Why AT&T Believes Mexico Is a Good Growth Opportunity

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Dec. 4 2020, Updated 10:51 a.m. ET

AT&T’s expansion into Mexico and Latin America

Mexico is expected to be a long-term value creator for AT&T (T). AT&T has made significant capex investments in Mexico and expects them to start paying off in 2017, which should improve AT&T’s profitability going forward.

During the MoffettNathanson Media and Communications Summit held on May 17, 2017, John Stephens, AT&T’s senior EVP and CFO, indicated that Mexico remains a bright spot with solid growth opportunity. 

AT&T’s management stated that the wireless footprint in Mexico now covers 85 million POPs (points of presence). In addition to a robust network, AT&T has strengthened its distribution and marketing infrastructure in Mexico.

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AT&T’s Mexico wireless net additions in 1Q17

In Mexico, AT&T added 633,000 wireless net subscribers in 1Q17 compared to 529,000 in 1Q16. In Latin America, DIRECTV added 91,000 video subscribers in 1Q17. According to the company, Latin America is performing well and generating cash while operating in a tough economic and political environment.

As a result, AT&T’s focus on its International Wireless and Video segments appears to be successful, allowing it to partially offset the ongoing weaknesses in the US. T-Mobile (TMUS) and Sprint (S) have made much of their ability to attract customers from other carriers, including Verizon (VZ) and AT&T.

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