--4G service to begin in nine cities, expanding to 26 in early
2013
--Mexico joins Puerto Rico, Brazil with 4G service
--Telcel investing $3.95 billion in 2012-2014 period
By Anthony Harrup
MEXICO CITY--Telecommunications heavyweight America Movil SAB
(AMX, AMX.MX, AMOV), Mexico's largest wireless service provider,
launched Tuesday its fourth-generation mobile service in Mexico,
with plans to expand the service to two-thirds of the country by
early next year.
America Movil Chief Executive Daniel Hajj said at an event
Telcel, the company's local mobile unit, is investing $3.95 billion
in the three years from 2012 to 2014 in network upgrades, including
at least $1 billion in equipment for the 4G LTE service.
4G LTE, which increases available download speeds to as much as
20 megabits per second, is starting in nine major Mexican cities
and is expected to reach 26 cities covering 65% of the population
by April of next year, Mr. Hajj said. Eventually the service will
be extended to prepaid customers, who make up the majority of
Mexico's mobile phone users.
Mr. Hajj said at present, around 35% of Telcel's 69 million
subscribers use data services, 20% with 2G and another 15% with 3G.
Telcel expects the expansion of data usage, which increased tenfold
in the past three years, will continue at a similar rate.
"It's hard to say how many customers will be in LTE, there are
still many customers who are switching from 2G to 3G...now surely a
lot of people who are using a lot of data in 3G will change to 4G,"
Mr. Hajj said. Pressed to make an estimate, he said between one and
three million could be expected to adopt 4G within a year. Charges
will be the same as for 3G, he said.
America Movil, Latin America's largest wireless-service provider
with operations in 18 countries, already has 4G service in Puerto
Rico and in some cities in Brazil. Mr. Hajj said other countries
will be added as spectrum becomes available via auctions.
In Colombia, some legislators have suggested America Movil
should be excluded from a spectrum auction planned for early next
year to support 4G. The criticism of America Movil's 60% market
share in Colombia prompted controlling shareholder Carlos Slim to
defend its position during a visit last month to the South American
country.
The exclusion of America Movil from the auction would deny
access to the new technology for 29.5 million customers, Mr. Slim
said.
Telcel has about a 70% share of the wireless subscribers in
Mexico, where it competes with Spain's Telefonica SA (TEF, TEF.MC),
Grupo Iusacell, a joint-venture of Grupo Televisa SAB (TV,
TLEVISA.MX) and Grupo Salinas, and NII Holdings Inc. (NIHD).
Write to Anthony Harrup at anthony.harrup@dowjones.com
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