Nuevo Grupo Iusacell S.A. de C.V. seems to be making moves to establish a nationwide wireless presence in Mexico.
Bell Atlantic Global Wireless Inc. confirmed it is in discussions regarding a combination or alliance that would involve Iusacell, in which Bell Atlantic has a 47-percent stake, and the cellular properties of northern Mexico. Bell Atlantic said the venture may result in a new prominent shareholder in the Iusacell business.
The northern A-band cellular operations in Mexico comprise four regional carriers-Baja Celular, Cedetel, Movitel and Norcel-in which Motorola Inc. is the major international investor.
This follows closely Iusacell’s announcement on Oct. 1 that it is considering making an offer to acquire Portatel S.A. de C.V., the A-band operator in the southern region of Mexico.
If both link-ups were to succeed, Iusacell would gain a nationwide cellular presence for competing with Radio Movil Dispa (Telcel), which holds nationwide cellular and personal communications licenses.
Currently, Iusacell has cellular licenses in four of the nine Mexican regions and 1900 MHz PCS licenses in two regions. The company has not indicated when it will launch its PCS service.
In other news, Iusacell announced positive third-quarter results, saying it posted its fourth consecutive quarter of positive net income. Its earnings before interest, taxes, depreciation and amortization was $374 million, compared with $249 million in the third quarter last year.
Iusacell said the strong third-quarter performance was a result of strong operating results, including revenues of $1.052 billion, driven by growth in digital contract subscribers and average revenue per user.
As of Sept. 30, the carrier had more than 1.1 million cellular customers, which included a base of 163,000 digital contract customers. It has completed implementing its Code Division Multiple Access digital network on all of its cell sites, which resulted in a 53-percent increase in depreciation costs compared with third-quarter 1998. Despite these extra costs, Iusacell posted an operating profit of $3 million for the quarter.
Third-quarter 1999 contract minutes of use and contract ARPUs increased 6 percent and 15 percent, respectively, compared with third-quarter 1998, said Iusacell.
Significant in its third-quarter activity was Iusacell’s introduction of a one-rate plan for local, national long-distance and international long-distance services to the United States and Canada and roaming calls. “The new product should generate added long distance and roaming traffic,” said the company. “Based on the positive consumer response, the one single rate plan has been extended to the company’s prepaid customer base.”
Also, the carrier said that in the first five months since it introduced calling-party-pays service, Iusacell has experienced about an 8-percent increase in traffic attributable to CPP. It reports a “considerable increase” in the percentage of incoming calls and cellular-to-cellular calls.
