AT&T’s expansion into Mexico
Mexico has been a huge success story and should be a long-term value creator for AT&T (T). In Mexico, AT&T has made significant capital expenditure or capex investments that it expects to start paying off in 2017, which should increase AT&T’s profitability.
There is a significant opportunity for AT&T’s expansion in Latin America and Mexico. AT&T’s management highlighted that the company has developed an immense distribution and marketing base as well as a great network in Mexico. The carrier has also updated, rebranded, and opened new stores.
In order to reach out to customers in an appropriate manner, the company’s focus is still on developing a strong employee base. Accordingly, due to the quality of AT&T’s products and services surpassing those of its rivals, AT&T could emerge as an attractive competitor.
In Mexico, it’s anticipated that AT&T will keep gaining market share as the carrier expands LTE (long-term evolution) coverage.
AT&T’s Mexico wireless net additions in 1Q17
Earlier in 1Q17, AT&T added 633,000 wireless net subscribers in Mexico, compared with 529,000 in 1Q16. Meanwhile, in Latin America, DIRECTV gained 91,000 video subscribers in 1Q17.
At the end of 1Q17, AT&T’s wireless footprint in Mexico covered 85 million POPs (points of presence). According to the company, Latin America is performing well and generating cash, though it’s operating in a tough political and economic realm.
AT&T’s focus on both its international video and wireless components appears to be helping offset continuing weaknesses in the US. Sprint (S) and T-Mobile (TMUS) have been cashing in on their ability to attract customers from other telecom companies, including AT&T and Verizon Communications (VZ).