AT&T has entered into an agreement with Grupo Salinas to acquire mexico's third-largest wireless operatorIusacell for US$2.5 billion, inclusive of Iusacell debt, as it seeks to grab a slice of a market with a fast potential growth. Under the terms of the agreement, AT&T will acquire all of Iusacell's wireless properties, including licenses, network assets, retail stores and approximately 8.6 million subscribers. The acquisition will occur after Grupo Salinas, the current owner of 50 percent of Iusacell, closes its announced purchase of the other 50 percent of Iusacell that Grupo Salinas does not own today.

Iusacell offers wireless service under both the Iusacell and Unefon brand names with a network that today covers about 70 percent of Mexico's approximately 120 million people. AT&T plans to expand Iusacell's network to cover millions of additional consumers and businesses in Mexico.

"Our acquisition of Iusacell is a direct result of the reforms put in place by President Pena Nieto to encourage more competition and more investment in Mexico. Those reforms together with the country's strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest," said Randall Stephenson, AT&T chairman and CEO. "Iusacell gives us a unique opportunity to create the first-ever North American Mobile Service area covering over 400 million consumers and businesses in Mexico and the United States."

Mexico has the second largest economy and one of the highest per capita GDPs in Latin America. The country today enjoys a strong credit rating, relatively low inflation and low unemployment.

Iusacell operates a 3G wireless network based on the global GSM/UMTS technology that AT&T uses in the United States. Iusacell owns between 20 and 25 MHz of 800 MHz spectrum, primarily in the southern half of the country, including Mexico City and Guadalajara, and an average of 39MHz of PCS spectrum nationwide. Iusacell's Total Play business, including the network assets to support pay TV and wireline broadband services will be spun out to Grupo Salinas' existing shareholders prior to AT&T closing its acquisition of Iusacell.

Recent changes to government policies in Mexico have created a friendly climate for foreign investment. This transaction gives AT&T the assets necessary to create a North American Mobile Service area for U.S. customers calling or visiting Mexico, and Mexican customers calling or visiting the United States.

The percent of Mexico's population that has wireless service lags Latin America overall. Smartphone penetration in Mexico is about half that of the United States. AT&T expects that as the price to acquire a smartphone continues to decline and the availability of higher-speed mobile networks in Mexico increases, there will be higher smartphone adoption and increased mobile Internet usage.

The transaction is subject to review by Mexico's telecom regulator IFT (Instituto Federal de Telecomunicaciones) and Mexico's National Foreign Investments Commission. AT&T expects the transaction to close in the first quarter of 2015.

Separate from its acquisition of Iusacell, AT&T said its Project VIP network investment plan is ahead of schedule. AT&T has essentially completed the expansion of its 4G LTE network, which now covers more than 300 million people in the United States. It has completed the build-out of wired high-speed Internet service to 57 million U.S. customer locations. And the company has deployed fiber connections to 600,000 of its planned 1 million multi-tenant U.S. business locations.