• A partnership between telecom platform-as-a-service specialist Oxio and Newfoundland Capital is acquiring Movistar Mexico
• The new owners will maintain the Movistar brand and management
• Mexico is the latest LatAm country Telefónica has exited

Telefónica has agreed a $450m deal to sell its Mexican subsidiary Movistar as it continues to exit Latin American markets.

Melisa Acquisition LLC – a consortium formed by telecom platform-as-a-service specialist Oxio and Newfoundland Capital Management – has agreed to buy Movistar Mexico, which will continue to operate under the Movistar brand and retain its current leadership team, according to an announcement by the private equity firms. 

The deal ends Telefónica’s long-running efforts to offload its Mexican unit, which reportedly included talks to sell to Beyond ONE, the digital service provider that operates the Virgin Mobile MVNO in the country, for around $520m.

Movistar is Mexico’s third-largest telco after America Movil’s Telcel and AT&T, and has also been looking to offload its Mexican unit, according to reports. One of the challenges is the relative market shares in the country: Telcel commands a 59% share of the market, compared with just 16% and 15% for AT&T and Movistar, according to figures from Mexico’s regulator.

For the acquiring partners, the deal means they can shift Movistar on to Oxio’s platform as part of a transition to a more agile, cloud-native and digitally driven operating model.

“This is an exciting new chapter for Movistar Mexico and a defining moment for Oxio,” said Nicolas Girard, Oxio’s founder and CEO. “Movistar has built a strong brand with a loyal subscriber base of more than 20 million customers, and we are committed to building on that foundation. Our cloud-native platform will support the company’s transformation into a next-generation telco, while meaningfully improving the experience for subscribers across the country.”

For Telefónica, the acquisition continues a strategy that started in 2019 and has seen it sell off operations and subsidiaries in Argentina (though the deal has been blocked by the Argentine government), Peru, Chile, Colombia and Ecuador, as it looks to improve profitability and reduce debt. It still owns operations in Brazil, which it plans to retain as part of its new strategic plan, and in Venezuela.

– James Pearce, Editor, TelecomTV