AT&T Mexico chief: will take 'couple of years' to shape up Mexico business

By Christine Murray

RIVIERA MAYA, Mexico (Reuters) - AT&T Inc will take "a couple of years" to shape up its new business in Mexico, where it competes with billionaire Carlos Slim's dominant carrier America Movil, AT&T Mexico Chief Executive Thaddeus Arroyo said in an interview on Thursday.

AT&T, which bought Mexico's No.3 and No.4 wireless carriers in the last few months, faces the task of integrating the two companies' networks to face off against Slim's telecoms group, which controls 70 percent of the mobile market.

The purchases gave AT&T, which was looking for growth outside the saturated U.S. wireless market, a cheap foothold in Latin America, but analysts don't see the Mexico unit having a major impact for some time.

"What we really want to do over the long term is deploy advanced fourth generation services to over 100 million Mexicans ... That will take a number of years," Arroyo said on the sidelines of a World Economic Forum summit on Latin America in the Riviera Maya.

AT&T is in the vanguard of companies seeking to benefit from sweeping telecoms sector overhaul finalized last year. The reform is forcing Slim to open up infrastructure and let rivals interconnect to his network for free.

"It actually will take us a couple of years to ultimately begin to enhance and begin to deploy the experiences that we're looking for," said Arroyo.

AT&T has said that Iusacell, whose previous owners never broke down numbers in detail, made a $27 million first quarter operating loss. AT&T also lowered Iusacell's number of subscribers to 5.97 million from the 9.2 million it said when the deal closed in January.

Arroyo highlighted Mexico's growing middle class and a relatively young population, and emphasized that companies are better positioned than government to enhance wireless services "because networks are living organisms to a degree."

He said that for the company to reach its goal of becoming market leader within a decade, it needs to be successful in both prepaid and postpaid mobile contracts.

Asked if the company is considering the acquisition of any America Movil assets, Arroyo demurred.

"We'll always continue to look at other alternatives in the market, but right now we really have our hands full," he said.

AT&T's purchase of DirecTV, which is still awaiting regulatory approval, would make it and Spanish-language television content Grupo Televisa co-investors in Mexico's biggest pay TV provider Sky.

(Reporting by Christine Murray; Editing by Simon Gardner and Christian Plumb)