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(Bloomberg) — A US technology service firm wants to boost mobile prepaid sales in Mexico by partnering with financial technology companies, its chief executive officer said.
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Earlier this month, a consortium of Oxio Inc. and Newfoundland Capital Management called Melisa Acquisition, announced the purchase of Telefonica Hispanoamerica SA, a unit of Spain’s Telefonica SA, for $450 million. This includes Telefonica’s Mexico business, Movistar.
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If the deal is approved, Oxio, which has telecommunications licenses in the US, Canada and Mexico, sees 40 million potential new users it can add to the existing customer base of Telefonica’s Movistar, Oxio’s CEO Nicolas Girard said in an interview April 16. He did not provide a timeline for the ramp-up.
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Oxio does not own physical telecom infrastructure like towers, so Girard said it aims to partner with existing network operators for the expansion.
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Oxio is looking to target the lower-income, prepaid market segment and compete with Bait, the mobile arm of Wal-Mart de Mexico SAB, the local unit of the US retailer. Oxio will use telecom data to create “sticky” service bundles, such as connecting users with financial products like loans from fintech companies, said Girard.
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“We think we can win by doing something different in Mexico,” he said. Girard declined to say which fintech or retail companies he’s looking to partner with or in what stage the negotiations are. But he did highlight Brazil’s Nubank and Plata in Mexico as successful fintechs.
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More than half of the Mexican mobile market is in the hands of billionaire Carlos Slim’s dominant carrier, America Movil SAB, and a 2014 bill to boost competition in the telecommunications industry failed to loosen his grip. In addition to Telefonica’s exit from the market, AT&T Inc. is also looking to sell off its assets in the country.
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Walmex’s Bait is a fast-growing competitor in the Mexican mobile market due to the retailer’s large network of stores.
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“Bait is very strong in retail, but we think we can compete on social media content, sports, fintechs and things of that nature,” said Girard. “We don’t think about a telecom user as such, we just think about a user that needs to communicate, that needs to pay for stuff.”
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English (US)