August 5, 2014 / 6:21 PM / 5 years ago

Britain's Lycamobile to enter Mexico amid telco shakeup - sources

MEXICO CITY, Aug 5 (Reuters) - Lycamobile, a British-based prepaid mobile virtual network operator (MVNO) that offers cheap international calls, is set to enter Mexico before the end of this year, two people with knowledge of the matter said.

The privately held company obtained a license to operate in Mexico earlier this year, and will use the network owned by Spain’s Telefonica, the sources, who requested anonymity as the plans were still not public, said.

Mexico is trying to open up its highly concentrated telecommunications sector with a reform led by President Enrique Pena Nieto to encourage foreign investment and curb the power of tycoon Carlos Slim’s America Movil.

America Movil, which controls around 70 percent of mobile subscribers, now has to share its infrastructure and cut the price it charges for others to connect to its network.

Telefonica, which serves about 20 percent of Mexico’s mobile customers, already has deals with Richard Branson’s Virgin Mobile, cable company Megacable and Maxcom to allow them to use its network.

However MVNOs, which do not own network infrastructure but rent it from rivals, still comprise a tiny portion of the Mexican market.

Lycamobile plans to focus on the prepaid cross-border market between Mexico and the United States, one source said on Tuesday.

Around 85 percent of mobile phones in Mexico are prepaid, the latest statistics from regulator the Federal Telecommunications Institute (IFT) show.

Elsewhere, Lycamobile focuses on providing cheap international calls and texts to 30 million customers across 17 countries, according to its website.

A spokesman for Lycamobile and a spokesman for Telefonica both declined to comment. (Reporting by Christine Murray and Michael O’Boyle; Editing by Richard Chang)

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