Bloomberg News

Telefonica Plans to Cut Mobile-Service Prices in Mexico

June 21, 2012

Telefonica Will Cut Prices in Mexico to Challenge Carlos Slim

America Movil, based in Mexico City, has 70 percent of Mexican wireless subscribers, compared with 20 percent for Telefonica and about 6 percent for Mexico City-based Iusacell. Photographer: Susana Gonzalez/Bloomberg

Telefonica SA (TEF) announced price cuts on long-distance calls and nationwide roaming in Mexico, to lure customers away from Carlos Slim’s America Movil SAB. (AMXL)

Telefonica, Mexico’s second-largest wireless carrier, will get rid of roaming charges throughout the country and offer a plan that charges for calls rounded to the second, instead of the minute, Mariano Moral, director of client service, said today in Mexico City. The Madrid-based carrier also will charge the same for calls to the U.S. and Canada as it does for long- distance calls within Mexico.

America Movil, the largest mobile-phone carrier in the Americas, faces a growing challenge from competitors in its home country of Mexico. Telefonica said last week that it would share its network infrastructure with Grupo Iusacell SA to improve coverage in the country. Iusacell also sold a 50 percent stake to broadcaster Grupo Televisa SAB, bringing a new investor into the Mexican phone industry.

America Movil, based in Mexico City, has 70 percent of Mexican wireless subscribers, compared with 20 percent for Telefonica and about 6 percent for Mexico City-based Iusacell.

“We’re going to grow a lot,” Moral said today. He declined to disclose the company’s market-share targets.

America Movil charges for roaming and has higher prices in most cases for international long-distance calls than for national long distance.

Telefonica also introduced a plan that allows users to dispose of their land-line phones while keeping their home-phone numbers, which will be forwarded to their wireless phones. With the service, the company seeks to encourage consumers to end their contracts with Telmex, America Movil’s land-line unit, which offers no similar service.

Telefonica gained 0.2 percent to 9.96 euros in Madrid. America Movil fell 0.3 percent to 17.45 pesos at the close in Mexico City.

To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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