Wednesday, May 21, 2014

America Movil and AT&T to Part Ways

The back story behind the AT&T/DirecTV merger is that if the combination is approved, AT&T becomes a new competitor to America Movil in Latin America.  AT&T executives have already resigned from the America Movil Board of Directors, and AT&T has placed their ownership in America Movil up for sale. This could also directly affect US wireless customers.

Any changes would be slowed by existing contracts, but let's look at what could happen with America Movil and AT&T no longer giving each other favorable treatment:

  • America Movil may need to pay higher roaming fees to use the AT&T network which may require higher prices, or reductions in features or data limits for US users, or potentially roaming available in fewer areas.  Remember, Straight Talk, NET10 and TracFone have no US network of their own.
  • AT&T customers may no longer have preferential roaming abilities in America Movil areas in Mexico and other Latin American countries, most notably our favorite deal of .25/minute Mexico roaming on AT&T GoPhone.
  • T-Mobile may rise to become the roaming leader in these Latin American countries, either with existing deals made outside of America Movil or with new deals that may offer greater competition to AT&T.
Of course, none of these changes may occur.  There are millions of dollars at stake and all of these companies may need to maintain the status quo to survive in a falling-rate environment.  Indeed, the sky may not be falling.

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