Telefónica Mexico Extends Network Sharing Agreement with AT&T

Telefónica Mexico has announced the extension of its network sharing agreement with AT&T to 2030. This extension extends an original eight-year agreement signed in 2019, which allows Telefónica to use AT&T's 3G, 4G, and 5G access network infrastructure in Mexico. Through this   collaboration they aim to increase both companies market share and contribute to the growth of Mexico’s telecommunications sector.

Globally, the impact of expanding network coverage has been remarkable, enabling telecommunications companies to offer greater coverage, faster speeds, and higher customer satisfaction. Presently, Long Term Evolution (LTE) expands across 227 markets, covering 83% of the global population, according to Telefónica's statements during the Mobile World Congress. 

The initial agreement is part of a network sharing strategy, which involved Telefónica Mexico transferring all of its spectrum licenses to the federal government in 2022, completing the migration of its traffic to AT&T's network. This migration allowed it subsidiary Movistar to continue operating as an independent operator, maintain control of its infrastructure and network platforms, and remain a leading mobile operator in the country.

This agreement adds to Telefónica's previous strategic moves in the Mexican market. In 2021, Movistar, AT&T Mexico and Telcel, signed a "social roaming" agreement with Altán Redes to expand coverage in rural areas. In addition, Movistar has maintained relationships with mobile virtual network operators such as Simplii and Virgin Mobile. As a result of this collaboration, AT&T's network in Mexico, which encompasses 3G, 4G, and 5G coverage, has enabled Movistar to maintain more than 24 million active subscribers. 

In the years this extension has been in place, Telefónica Mexico has seen significant improvements in its economic performance. In fiscal year 2023, the company reported an operating income of more than US$3.5 million compared to an operating loss of more than US$180 million the previous fiscal year. This represents a year-on-year growth of 12.5%, surpassing US$1.4 billion in net income.

In the context of the Mexican and Latin American market, this expansion reflects a strategic move toward greater operating efficiency and expanded network coverage. In a market dominated by players such as Telcel, who commands over 59%  (82.5 million) of Mexico’s mobile lines market share, Movistar is actively seeking to bolster its position and share. According to the Market Report of the Federal Telecommunications Institute (IFT), Movistar’s market share has steadily increased from 16.4% in 2022 to 18.2% in 2023.

"For AT&T Mexico, the extension of this agreement confirms the commitment of both companies to the country and their desire to continue contributing to the development of the telecommunications sector in the country," reads Telefónica's press release. "In addition, the extension of the agreement strengthens the ability of each company to compete in a highly concentrated market.”