Bell Atlantic Corp. said it has gained management control of Grupo Iusacell after the Mexican government authorized the transfer from Grupo Iusa, Iusacell’s majority owner.
Mexico’s “markets are opening up for all kinds of telecom services,” said Bell Atlantic spokesman Brian Wood. “Iusacell will be facing all sorts of stiff competition. We need to turn business around and prepare for the next phase of growth. Iusacell has several franchises, long distance, cellular, paging and experimental fixed wireless local loop. It has a lot of strengths, and it needs outside help to take it to the next level.”
Wood said Iusa, wholly owned by the Peralta family, wants to focus on its other interests in construction, automotive equipment and financial services now that the Mexican economy is improving.
Iusacell has been affected by Mexico’s poor economy and has not seen the financial results that were expected, noted Wood. “We’re two years behind what we thought the results would be,” he said.
Bell Atlantic has committed to provide up to $150 million in financing to enhance Iusacell’s existing operations and seek new business opportunities. In addition, Grupo Iusa and Bell Atlantic announced they have converted about $70 million in Iusacell indebtedness into approximately 1 million shares of Iusacell voting stock.
The new structure will not change Iusacell’s relative ownership, said Bell Atlantic. Iusa will continue to own 48 percent and Bell Atlantic will maintain 42 percent with the remaining 10 percent publicly traded.
As part of the structure changes, Bell Atlantic Vice Chairman Lawrence Babbio, Jr., has been appointed vice chairman of Iusacell’s board. Bell Atlantic now controls a majority of Iusacell’s board seats.
The company also named Tom Bartlett head of Iusacell’s senior management implementation team. Bartlett will take on the roll of Iusacell’s new president and chief executive officer and will continue in his current responsibilities as president and CEO of Bell Atlantic International Wireless.
The company said its focus going forward will be on the Mexican market, leveraging Iusacell’s local market knowledge and Bell Atlantic’s international success to further enhance Iusacell’s marketing, distribution, network operations and customer service.
Iusacell’s cellular division serves four of Mexico’s nine regions in the central portion of the country, including Mexico City, covering 70 percent of the country’s total population.
