Mobile firms encroach on Nextel

Mobile firms in Mexico such as Telcel and Iusacell (NYSE: CEL) are preparing to compete more directly with digital trunking operator Nextel Mexico by launching push-to-talk (PTT) services, according to local newspaper El Norte. Once the exclusive domain of Nextel Mexico, such walkie-talkie services enable users to connect cheaply with distant GPRS networks, undercutting international mobile call rates. Nextel Mexico is at a disadvantage because it does not hold a mobile license, the mobile firms say. Telcel, a subsidiary of Carlos Slim's América Móvil (NYSE: AMX), plans to launch its PTT service by the fourth quarter of 2004, according to company spokesperson Patricia Ramírez. This year Telcel is putting US$600mn into its network to support the roll out. "We would offer this service over the network we currently have. It is a technology that packages voice and enables us to send it over the GPRS and national GSM networks with a coverage of 600 cities," Ramírez was quoted as saying. Meanwhile, Iusacell plans to launch its own service this week, to be bundled into its mobile plans. "It will be sold as mobile with a radio application, different from what Nextel is doing. They sell the radio but their problem is that because they lack a mobile concession, they [would] have to purchase some carrier in order to offer telephony," Iusacell general director Gustavo Guzmán was reported as saying. Mobile operator Unefon has already entered the PTT market, expecting to attract some 500,000 subscribers over the next five years. Byron Siliezar, CFO of NII Holdings (Nasdaq: NIHD), the parent company of Nextel Mexico, previously told BNamericas he does not view the gathering storm of PTT competition as a big threat, mostly because operators are targeting the mass market instead of Nextel's corporate market. "We saw that in the US offerings made to compete with Nextel have not really gone anywhere. We think that the business model for serving business and corporate customers on a postpaid basis is very different than the mass market prepaid segment that most of our competitors are going after," Siliezar said.