Telefonica and Iusacell are reportedly discussing whether to combine their networks fully in Mexico.
The two operators already share their networks to provide better coverage and reduce costs.
Combining Iusacell with Telefonica’s Mexican unit Movistar would create an entity with 28.4 million subscribers – still a fair distance behind America Movil’s massively dominant Telcel, which has 73.2 million connections.
Despite this, a merger between the second and third placed operators would give the resulting entity control over almost the entire remaining market, meaning that it could come under scrutiny from the country’s regulator – particularly as Mexico is on the cusp of implementing proposals aimed at increasing competition in the market.
America Movil is due to be investigated by the new Mexican regulator IFT (Federal Telecommunications Institute), with the operator expecting to be deemed too dominant. The IFT will then implement measures to restrict this and foster competition.