América Móvil should focus investments on Mexico - analyst

Last week América Móvil announced its intention to invest US$6bn in the Mexican market in the next three years, which will be the most significant investment the company has made in its home country in years.

The company announced the investment in response to newcomer AT&T's plans to invest US$3bn in the market in the same period.

However, this does not mean América Móvil is focusing its attention on Mexico.

"It would work to its benefit to ramp up the investment," Ernesto Piedras, president at consultancy the Competitive Intelligence Unit (CIU), told BNamericas. "But the telecom reform aims to limit its operations in Mexico, which could push [América Móvil] to leave Mexico unattended."

América Móvil has been focusing its efforts on other Latin American markets. According to CIU, in Mexico the company invests less than a quarter of the average investment it makes in the rest of the region, despite its market share being considerably lower than the 70% it has in its home country.

In Brazil, for instance, América Móvil's market share is less than 25%, but the company's investments are five times higher than in Mexico.

AT&T's investment plans will be aimed at expanding the 4G LTE network through Mexico up to the US, reaching 400mn POPs in North America by 2018.

The US$3bn earmarked for this expansion represent 37% of AT&T's revenue in 2014, according to CIU. On the other hand, América Móvil's planned US$6bn investment is equivalent to 15% of the company's revenue last year.