Telefonica is reported to be in talks to combine its Mexican unit with the operations of Grupo Iusacell with a view to forming a larger entity better equipped to compete with America Movil’s local mobile outfit Telcel. According to Bloomberg, it has yet to be decided which company would control a combined Movistar Mexico/Iusacell. With the report citing unnamed sources with knowledge of the matter, it claims that Telefonica is being advised by Banco Bilbao Vizcaya Argentaria SA and Lazard Ltd. However, it has been noted that a merger of Movistar Mexico and Iusacell could draw the attention of the local telecoms regulator, which is keen to ensure consumers have a range of options when it comes to mobile services; with Telcel accounting for around 70% of Mexico’s mobile subscribers, a combined Movistar/Iusacell entity would represent a significant portion of the remainder, theoretically limiting customer choice.
Meanwhile, Spain’s El Economista is said to have claimed that Telefonica is actually in talks to buy Iusacell, citing unnamed sources familiar with the matter.