These companies service an area with a combined population of more than 20 million inhabitants. The operators, which began providing service in 1990, are 100% owned by Motorola, with the exception of Movitel, in which Motorola has a 90% stake.
Telefonica Moviles assumes management control of the four units before the regulatory approvals required for the purchase have been finalized. The approval process is underway and is expected be completed during second quarter 2001, according to the purchase agreement signed last October by Telefonica, Telefonica Moviles and Motorola.
To carry out the acquisition, the upcoming annual general meeting of Telefonica, S.A. will be asked to approve a capital increase for the purpose of purchasing the four companies through an exchange of shares, which will later be transferred to Telefonica Moviles.
Subsequently, Telefonica Moviles will hold a capital increase, which has already been approved. The new shares will be turned over to Telefonica, S.A. in exchange for the participations in Bajatel, Movitel, Norcel and Cedetel. This same procedure was for the transfer of cellular assets in Argentina to Telefonica Moviles and will shortly be used for those in Peru.
The Mexican cellular market is divided into nine regions. Mexico is the second-largest cellular market in Latin America, with a population of 99 million inhabitants and approximately 11 million mobile telephone customers as of June 2000. The low penetration rate for mobile telephony (11% as of June, 2000), similar to that of fixed telephony, and the favorable macroeconomic outlook, underscore t he country’s growth potential for cellular telephony. The north of Mexico is particularly attractive, given its large concentration of industry, high population growth rate and proximity to the United States.
