Telefonica eyes potential deal in Mexico
MADRID - Spains Telefonica is in talks over a possible deal in Mexico, where it has been eyeing acquisitions for months to strengthen its position against former monopoly America Movil, the telecoms group said yesterday.
The Spanish firm said it had not reached any agreement. Sources close to the group said any deal was not likely to be imminent.
Earlier yesterday website El Confidencial, citing unnamed sources close to the talks, had reported Telefonica was close to acquiring Mexicos third largest wireless telecoms company Iusacell, worth up to 3 billion euros (US$4 billion).
Telefonica declined to comment specifically on whether it was negotiating an acquisition of Iusacell.
Telefonica has about 20 per cent of Mexicos cellphone market while Iusacell has about 8 per cent, well behind America Movil, which has about 70 per cent.
But America Movil said earlier this month it was ready to divest assets in an unprecedented step to cut its market share below 50 per cent in response to the toughest battery of regulations in over 20 years, fuelling competitors hopes that the market would become more competitive.
Analysts however said a potential tieup between Telefonica and Iusacell, while positive, would not drastically change market conditions in Mexico, which accounts for just around 1 per cent of the Spanish firms core profit.