The subsidiary of Telefónica in Mexico signed a last mile wireless access agreement with AT&T, which will allow Movistar to use the access network in 3G, 4G and any future AT&T technology, an agreement with which the company seeks to achieve greater efficiency of its business in the complicated Mexican market and with which it reaffirms its commitment to remain in the country.
Telefónica notes that the agreement, signed through its subsidiary Pegaso, is a long-term agreement, since it will last for a minimum of eight years, and will allow it to continue as an independent operator in this market by maintaining substantial elements of its own infrastructure of network and platforms.
In a statement sent to the National Securities Market Commission (CNMV), the company indicates that it is expected that this model of operation of Telefónica Mexico will generate operational and financial efficiencies with an annual positive impact on cash flow of approximately US $254 million as of the third year.
It also highlights that this new model allows a “more efficient and sustainable” use of resources, thereby increasing the return on capital employed, and anticipates that it will generate a reduction in additional net debt in the area of US $553 million.
The company details that, with this agreement, AT&T in Mexico will provide Telefónica Movistar with capacity in its 3G, 4G access network and any future network technology nationwide. Telefónica Movistar maintains its transport network and all its platforms, without operational or geographical restrictions to cover all the needs of its users and services.
Likewise, it will also maintain exclusive control over its operations, including its client portfolio, assets, administration, prices, finances, marketing or billing systems, among others. “AT&T will not have visibility or influence on the operation of Telefónica Movistar,” they said in a statement.
Along these lines, it also informs that the migration of Telefónica Movistar traffic to the AT&T access network will begin “immediately” and will continue to be implemented gradually, continuously maintaining all mobile services to its residential, business and wholesale customers.