Why AT&T's Mexico investment is a 'smart' move

AT&T's re-entrance into Latin America in 2015 as a telecoms operator through the acquisition of two Mexican mobile operators – Iusacell and Nextel – is hugely significant for telecommunications as well as for IT.

On the telecoms front, the arrival of the US telecoms giant is providing much needed investment in 4G networks, a counterbalance to the monopoly of América Móvil in Mexico, and forces all players to up their game. AT&T's acquisition of DirecTV adds a whole new dimension of what is possible in terms of converged service offerings with video in Latin America.

AT&T has offered corporate communications solutions to multiple industries in the region for years, but recently, the telco has ramped that up, pioneering exploration of the industrial internet with a particular focus on smart cars and smart cities.

The company has multiple global partnerships with leading IT and telecoms firms that together are developing new technologies and standards. And with AT&T now having a firm foothold in Latin America, all of those innovations will reach the region faster than ever before.

BNamericas spoke to Ralph de la Vega, a Cuban native, and the man that is heading the expansion in Mexico, DirecTV operations in Latin America and innovation in ICT solutions, to ask him about his vision of AT&T's future in the region.

BNamericas: AT&T plans to invest US$3bn in Mexico by 2018. How is the rollout going?

De la Vega: In Mexico, we're seeing a transformation of the telecoms industry. It's going to get more competitive, more customer-centric and more technologically advanced.  We see great potential in the overall environment in Mexico; a middle class is beginning to surface.

We invested US$4.4bn to acquire Iusacell and Nextel and plan to invest US3bn from 2015-2018.

We invested in Mexico because of the telecoms reform, which shows terrific vision on the part of the government. It shows how the government is serious about fighting for fair competition. There's still work to be done but we're confident the government will remain focused. We couldn't feel better about the opportunity in Mexico.

We currently have 4G LTE coverage of almost 70mn people in 74 cities. People are seeing sometimes up to six times faster speeds. This will be available to 100mn people by the end of 2018.

BNamericas: AT&T plans to build a pan-regional network covering North America. Will users be able to move between the US and Mexico with the same rates?

De la Vega: That's our goal, to make it a seamless and effortless transition for our customers. They get off an airplane in Mexico City and it will be no different to setting foot in Dallas, Texas.

Our plan is to cover 400mn people. Our investments will help other industries because businesses will know they can expect the same high quality network.

BNamericas: AT&T has said it will change Nextel and Iusacell to the AT&T brand in Mexico when there is sufficiently high quality. When is that likely to happen?

De la Vega: There now 32 cities using the AT&T brand in Mexico, including Mexico City. We grow almost weekly. We don't use the brand until we're satisfied our network is of the quality that people have come to expect from AT&T.

BNamericas: What do you think of the shared network the Mexican government is trying to auction this year using the 700MHz band?

De la Vega: We think it's a great idea. The government has done a great job in encouraging investment and more competition. The wholesale network will allow MVNOs to come and take part in the market. Anything that encourages competition is good.

BNamericas: What synergies do you see in Mexico and Latin America from the DirecTV acquisition?

De la Vega: We have DirecTV operations in 11 Latin American countries, not including Mexico, where we have a venture with Televisa and Sky and own a 41% minority share.

This venture we think is something we can do better together in the future. But for now we're concentrating on launching our wireless network and continuing to look for ways to address customer needs by providing integrated services.

BNamericas: So could you launch something in Mexico like the U-verse triple play offering you have in the US?

De la Vega: We don't have U-verse in every state in the US, but we do have a national footprint with DirecTV and think that the learning we gain in the US from bundling TV we will export to other countries. Each country will have a different timeline and different situation and assets. But we like the partnership with Televisa and are confident about our growth in Mexico.

BNamericas: AT&T is exploring solutions in the internet of things (IoT) and has agreements with nine manufacturers worldwide to develop smart cars. Will those agreements apply to Latin America?

De la Vega: We're seeing a huge transformation in how cars perform and are made and are great believers that all cars should be connected. We have partnerships with Canadian carriers and with the network investments we're making in Mexico we'll offer manufacturers a single state of the art network.

Wi-Fi connectivity in cars is one of the main advertising draws we see today. We've come a long way but there's so much more we're going to be able to do. As we go forward with semi-autonomous and autonomous cars, they all require high levels of connectivity and low latency, which we're beginning to see in 4G and will see more with 5G.

BNamericas: How important is it to work with partners to develop IoT solutions?

De La Vega: This is an ecosystem and we think that what we do enables innovation from other big companies. The future requires collaboration.

We've built six foundry innovation centers around the world that provide a collaborative environment with technology companies. At the Texas Medical Center in Houston, we believe there's some tremendous innovation taking place and in our latest hackathon we had some participants from Mexico City.

BNamericas: Smart cities is another major focus of AT&T Business Solutions isn't it?

De la Vega: This program helps cities take advantage of new technologies, specifically involving IoT. Every city has a different approach. Some are concerned with water purity, others with reducing traffic congestion. It has gained a lot of attention and I love the partnership that's taking place between public and private enterprises. AT&T is leading the way and the things we're learning in the US can be transferred to other countries.

BNamericas: Which industries hold the most potential and how will 5G move that along?

De la Vega: One of the benefits of 5G, in addition to having multiple times the download speed of 4G, is the latency that is inherent in flatter network architecture. So, for autonomous driving, a car approaching an intersection needs fast connections with low latency to make critical decisions.

We've always been focused on healthcare. This is revolutionary as people start to adopt bio sensors and wearables. This is beginning to change the way we behave. With the combination of sensors and data analytics, we're moving to individualized medicine.

It's the same in education. When you put broadband in people's hands it opens up a window to a world they've never had before. You open up innovation that has been dormant because people didn't have the ability to connect to the rest of the world and collaborate. That's why telcos are an enabler.