--Mexico unit offers plan to charge calls by the second for
first time
--CEO Juan Abellan says new products should draw millions of new
users
--Mexico is first country to get four-in-one service "Movistar
Total"
By Laurence Iliff
MEXICO CITY--The Mexican unit of Spanish telecom giant
Telefonica SA (TEF, TEF.MC) launched a series of wireless products
Thursday that Chief Executive Juan Abellan said are designed to
draw millions of new users from rivals like market leader America
Movil SAB (AMX, AMX.MX) by offering payment plans that charge by
the second for calls and offer four services in one phone.
Speaking at a news conference, Mr. Abellan didn't give an exact
target of how many users Telefonica Mexico, which operates under
the Movistar brand, expects to add with its new suite of services.
He said the goal is many millions of current users that the company
hopes to poach from competitors like America Movil's local unit
Telcel, as well as adding users new to the world of cellular phones
and mobile Internet.
"A [cellular] telephone is practically in the basket of basic
goods," Mr. Abellan said, adding that Telefonica wants to help
Mexico close "the digital gap" it faces when compared with other
Latin American nations like Brazil, Colombia and even Venezuela in
terms of wireless penetration.
Telefonica also is investing heavily in infrastructure, with a
new cellular tower going up every three hours, which builds on the
strategic alliance signed last week with cellular provider Iusacell
to share their national networks, the chief executive said.
The Telefonica network now covers 90% of the Mexican population,
or about 100 million people, ending the "myth" that its coverage
area is inferior to that of its competitors, said Mariano Moral,
head of client services for Movistar Mexico. Telefonica is Mexico's
No. 2 wireless provider, with about 20 million subscribers, or 22%
of the market.
Mr. Abellan took several critical shots at Telcel and the
controlling shareholder of America Movil, billionaire Carlos Slim,
for what he called monopolistic practices and expensive pricing.
Telcel has about 67 million subscribers, or 70% of the Mexican
market. Mr. Abellan said that is the same percentage that Telcel
had when Telefonica arrived in Mexico 12 years ago.
America Movil has responded to criticism about its pricing and
market conditions by pointing to studies that show pricing in
Mexico is on par with developed nations like the U.S.
Mr. Abellan, who took over Telefonica Mexico eight months ago,
introduced the company on Thursday as "the new Movistar," and said
the company's relaunch has been months in the making and represents
a firm commitment to Mexico by the parent company.
One product highlighted by Mr. Abellan is the pay-by-the-second
plan for people who mostly use their cellular phone for short,
purpose-related calls. The plan costs as little as 250 pesos ($18)
a month for up to 3,000 seconds, which can be used for calls to
anywhere in Mexico, the U.S. and Canada, since Movistar no longer
adds "roaming" surcharges. The plan also allows, for the first
time, one "free" mobile number to a rival cellular provider like
Telcel.
Another product executives launched was the four-in-one service
Movistar Total, which allows users to designate a "fixed-line"
telephone number to avoid cellular fees for a limited number of
calls, along with a standard mobile number, Internet and unlimited
push-to-talk radio.
Write to Laurence Iliff at laurence.iliff@dowjones.com