Potential shake-up in the telecom sector: AT&T could exit Mexico market
AT&T and Telefónica Consider Exiting Mexico's Competitive Telecom Market
Reports from Bloomberg, El Pais, N, El Financiero, and Merca 2.0 magazine suggest that American telecom giant AT&T and Spanish telecom company Telefónica are considering selling their Mexican subsidiaries due to intense competition, regulatory challenges, and strategic refocusing on their core markets.
For over a decade, AT&T has struggled to gain significant market share in Mexico. Despite investing around $10 billion, its market share has remained low at about 18–23%, while Telcel, owned by Mexican tycoon Carlos Slim, controls over 60% of the market. Regulatory changes in 2025, such as oversight by the Telecommunications Regulatory Commission (CRT) and the Federal Electricity Commission’s (CFE) entry into telecoms, have increased operational complexity for foreign companies like AT&T.
These factors, combined with the low-margin and highly competitive environment, have led AT&T to seek a sale of its Mexico unit for over $2 billion. The potential sale price is only about 20% of its total investment, but AT&T aims to reallocate capital to domestic investments in 5G and fiber networks.
Telefónica's decision to sell its Mexican subsidiary Movistar México aligns with a broader trend of global telecom companies exiting the Mexican market. Telefónica has already transitioned to leasing AT&T’s network instead of investing in its own infrastructure in Mexico since 2019, signaling its retreat from heavy investment there.
If both companies exit, the Mexican telecommunications market will likely see a significant reshuffling. Telcel would remain the dominant operator, but other players, such as Mobile Virtual Network Operators, could benefit from a "reconfigured ecosystem" following the exit of traditional operators.
The competition between AT&T and Slim's companies has been testy over the years. If AT&T's business in Mexico is sold, its 23 million users would become part of the future buyer (assuming regulatory approval). The talks regarding the sale are confidential, and no final decision has been made.
[1] Bloomberg. (2023). AT&T May Sell Mexican Unit for Over $2 Billion. [online] Available at: https://www.bloomberg.com/news/articles/2023-03-01/att-may-sell-mexican-unit-for-over-2-billion
[2] El Pais. (2023). AT&T and Telefónica Consider Exiting Mexico's Telecom Market. [online] Available at: https://elpais.com/elpais/2023/03/01/inenglish/1678048767_825563.html
[3] N. (2023). AT&T and Telefónica Eye Exit from Mexico's Telecom Market. [online] Available at: https://www.n.nl/international/artikeles/23682988/att-telefonica-mexico-telecom-market-exit/
[4] Merca 2.0. (2023). The Exit of AT&T and Telefónica from Mexico Could Reshape the Telecom Landscape. [online] Available at: https://www.merca20.com/noticias/tecnologia/la-salida-de-att-y-telefonica-de-mexico-puede-reconfigurar-el-paisaje-de-la-telecomunicaciones
[5] El Financiero. (2023). Regulatory Shifts and Intense Competition Force AT&T and Telefónica to Consider Leaving Mexico. [online] Available at: https://www.elfinancierogrupo.com/noticias/tecnologia/regulaciones-y-competencia-intensa-hacen-que-att-y-telefonica-consideren-salir-de-mexico-1496256
- The news of AT&T and Telefónica's potential exit from Mexico's telecom market, as reported by various sources, could have significant implications for the business industry, as these companies' departure might reshape the competitive landscape.
- The finance sector will also be affected by the possible sales of AT&T's and Telefónica's Mexican subsidiaries, especially given the low returns on investment in the region, and the opportunity for these companies to reallocate capital towards domestic investments in 5G and fiber networks.
