Potential alterations in the telecommunications industry as AT&T considers exiting Mexico
Two major foreign telecommunications companies, AT&T and Telefonica, are planning to exit the Mexican market due to regulatory challenges, strong local competition, and strategic refocusing.
AT&T's Struggles in Mexico
AT&T entered the Mexican market in 2014 by acquiring Grupo Iusacell for $2.5 billion and then NII Holdings' Mexican wireless business for $1.9 billion. Over about a decade, it invested roughly $10 billion but faced tough competition from América Móvil, led by Carlos Slim, which dominates the market. In 2025, AT&T is reportedly seeking to sell its Mexican mobile unit for over $2 billion.
The exit is driven by increased regulatory complexity after the creation of the Telecommunications Regulatory Commission (CRT) and the entry of the state-owned Federal Electricity Commission (CFE) into mobile and internet services. If sold, AT&T’s 23 million Mexican subscribers would transfer to the buyer subject to regulatory approval.
Telefonica's Departure
Telefonica (Movistar México) is also divesting its Mexican operations as part of a broader strategy to exit Latin America and concentrate on core European markets with higher returns. The sale of Telefonica's Mexican unit is valued near €520 million (~$609 million), and their decision is influenced by regulatory risks linked to Mexico’s recent telecom laws favoring state-backed competitors and increasing operational complexity for foreign firms.
Potential Impacts on Mexico’s Telecom Landscape
The departure of these two major foreign players could reduce competition, potentially strengthening América Móvil’s dominance as the leading wireless provider in Mexico. The government’s regulatory framework and the presence of state-backed operators like CFE may discourage foreign investment and limit market entrants, potentially affecting service quality and pricing dynamics.
The identity and strategy of potential buyers (e.g., local or international groups like Dubai’s Beyond ONE showing interest in Telefónica’s assets) will shape future competition and investment in infrastructure. Both AT&T and Telefonica are redirecting capital toward markets with higher returns or domestic priorities.
In summary, AT&T and Telefonica are exiting Mexico amid regulatory, competitive, and strategic pressures, which may lead to increased market concentration and raise concerns about foreign investment attractiveness and competitive dynamics in the country’s telecom sector.
- News reports suggest that the exit of AT&T from the Mexican market could have significant implications for the business sector, as the sale of their mobile unit valued at over $2 billion may lead to a shift in the industry dynamics.
- In light of Telefonica's decision to sell its Mexican operations for around €520 million, finance experts have hinted at potential ripple effects on the industry, as the move signals a broader trend of foreign companies reallocating resources to more profitable markets.
