Will American Tower's fiber-based strategy impact the Mexican market?

Boston-based telecom tower operator American Tower Corporation (ATC) closed the acquisition of Mexican IT company Kio Networks' infrastructure subsidiary, enabling the former to offer fiber-to-the-tower services.

Although the transaction will certainly generate added value for ATC, it is unlikely that it will change the composition of Mexico's telecom tower market, said Gonzalo Rojón, director of regulatory analysis at consultancy firm Competitive Intelligence Unit (CIU).

"Let's keep in mind that the reason why operators are selling their infrastructure is because it is not their core business and its maintenance translates into costs for the operators," Rojón told BNamericas.

Kio Networks' infrastructure will allow ATC to offer integrated services, whilst reducing maintenance costs for operators. "I think ATC will even be in a position to build sites according to an operator's specifications, ultimately helping telcos in their core operations," Rojón added.

Nonetheless, Rojón does not believe the acquisition will have much impact on Mexico's telecom sites market, at least in the near future.

ATC is the second-largest telecom sites provider in Mexico, after Telesites. In the first quarter of this year Mexico had 29,320 telecom towers, with 14,917 belonging to Telesites and 8,913 to ATC.

"I don't see the transaction helping ATC getting ahead of Telesites any time soon, given the difference in tower ownership between these two. However, it will certainly make ATC's offer more attractive and its competitors may even follow suit," said Rojón.

The consultant underscored that many tower companies in Mexico are rather small, thus lacking the capabilities to carry out similar acquisitions, which puts ATC at an advantage. "I don't know if Telesites is offering similar integrated services, but it does have the financial muscle to do so," Rojón added.

According to CIU information, eight groups provide telecom sites leasing services in Mexico: Telesites, ATC, Centennial, Torrecom, Mexico Tower Partners, IIMT, Intelli Site Solutions, and Uniti Towers.