Carlos Slim, One of World's Richest Men, Gets -2-

01/30/18 12:12 PM EST

After the Supreme Court setback, AT&T executives say they are digging in for a long battle. A poster board sign in the office of Troy Hatch, the company's general counsel for Mexico, lists all the telecom operators that have come and gone from the Mexican market over the years.

"We didn't come here to be a 12% market share company. We came here for the long run," says Kelly King, AT&T's Mexico chief. He says the regulatory changes since 2013 help upstarts like AT&T justify steep expansion costs.

In November, Mexico's telecom regulator set a fee of 3 centavos (about 0.2 cents) a minute for competitors to connect to Mr. Slim's network. While Telcel must pay roughly three times as much a minute to connect to competitors' networks, the ruling is likely to cost rivals tens of millions of dollars a year because of the huge number of Telcel users.

AT&T is trying to gain even more ground on Mr. Slim by investing in rural areas where Telcel has no towers and is barred by the 2014 law from setting up a network.

Last year, the owner of a taco restaurant in Atécuaro, a tiny hamlet of 2,000 people on the slopes of a volcano in the agricultural state of Michoacán, took a bus to Morelia, the nearest large city with an AT&T store, to complain about the poor service in the village.

In response, AT&T installed a cell tower in Atécuaro and offered hundreds of discounted, 3G-enabled smartphones to residents. AT&T reasoned that because Michoacán exports migrant workers to the U.S., many of them would want an AT&T plan with cheap roaming on its U.S. network. Nearly everyone has switched to AT&T smartphone plans, local residents say.

Write to Robbie Whelan at robbie.whelan@wsj.com

 

(END) Dow Jones Newswires

January 30, 2018 12:12 ET (17:12 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.