Telefonica to Invest $88 Million in Mexican Data Market Mike Drach
📅 - Telefonica, a leading Spanish telecom company, recently announced plans to expand its empire into Mexico, and to invest $88 million in its Mexican data unit over the next four years.
"The group is taking another step to consolidate its presence in this market," Raul Flores, marketing director for Telefonica Data Mexico, said at a news conference. Mexico is the only major Latin American market that Telefonica has not had a major stake in until now.
Telefonica Data Mexico is offering high-capacity data services and communications, including Web hosting, VPNs, and Internet connectivity to corporate clients, renting fiber optic infrastructure from local operators.
By 2005, the company intends to offer service in at least 60 cities, obtaining a 15 percent share of the Mexican data market. Since Mexico's laws prohibit majority foreign ownership of certain types of phone operators, Telefonica Data Mexico is 52 percent owned by a Mexican holding company, Telefonica Data Holding. Among the other stakeholders are Telefonica and Principia, a private telecom holding company that also is also involved in satellite communications in Mexico.
Although Telefonica has become a major contender in Brazil, Peru, and Argentina, the Spanish company has only entered the Mexican market in the last two years. The company's Internet arm, Terra Lycos, acquired leading Mexican ISP Infosel in 1999, and has since become a strong internet force here. Telefonica then went on to claim stakes in the mobile telephone and data operation industries. Recently, the company's Atento division opened call centres in Mexico. They are now one of the major European investors in Mexico, according to chief executive Jose Angel Veiga.
Other companies have attempted to make moves into the Mexican telecom market, but often complained of unfair competition from Telmex, the major local carrier. Telefonica actually rents much of their broadband capacity from Telmex, offering data services with no fiber optic infrastructure of their own. According to Veiga, Telefonica's relationship with Telmex is healthy, and the dominant carrier has not posed any problem.
"The group is taking another step to consolidate its presence in this market," Raul Flores, marketing director for Telefonica Data Mexico, said at a news conference. Mexico is the only major Latin American market that Telefonica has not had a major stake in until now.
Telefonica Data Mexico is offering high-capacity data services and communications, including Web hosting, VPNs, and Internet connectivity to corporate clients, renting fiber optic infrastructure from local operators.
By 2005, the company intends to offer service in at least 60 cities, obtaining a 15 percent share of the Mexican data market. Since Mexico's laws prohibit majority foreign ownership of certain types of phone operators, Telefonica Data Mexico is 52 percent owned by a Mexican holding company, Telefonica Data Holding. Among the other stakeholders are Telefonica and Principia, a private telecom holding company that also is also involved in satellite communications in Mexico.
Although Telefonica has become a major contender in Brazil, Peru, and Argentina, the Spanish company has only entered the Mexican market in the last two years. The company's Internet arm, Terra Lycos, acquired leading Mexican ISP Infosel in 1999, and has since become a strong internet force here. Telefonica then went on to claim stakes in the mobile telephone and data operation industries. Recently, the company's Atento division opened call centres in Mexico. They are now one of the major European investors in Mexico, according to chief executive Jose Angel Veiga.
Other companies have attempted to make moves into the Mexican telecom market, but often complained of unfair competition from Telmex, the major local carrier. Telefonica actually rents much of their broadband capacity from Telmex, offering data services with no fiber optic infrastructure of their own. According to Veiga, Telefonica's relationship with Telmex is healthy, and the dominant carrier has not posed any problem.
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