Movistar Mexico exit: No service changes for customers

Mexico City — Telefónica’s announcement that its Movistar brand will exit Mexico has raised questions about what will happen to the company’s 21 million customers, but an industry expert says service will continue without disruption.

“Customers should rest assured—their service will keep operating. Nothing will happen; it simply changed ownership. The brand won’t even change for some time, at least until 2030,” said Ernesto Piedras, general director of Competitive Intelligence Unit, in an interview with Ciro Gómez Leyva.

Piedras explained that Movistar had already been operating as a mobile virtual network operator running on AT&T’s infrastructure. It will now belong to the company OXIO.

“It’s even foreseeable that packages and top-ups could improve with better prices, so customers should be calm that their service will continue. There’s no reason for it to change,” the specialist added.

Challenges for OXIO After Acquiring Movistar

Piedras noted that competition among telephone companies revolves around offering the best packages, data allowances, and options for users.

“For the same amount we pay, there are more gigabytes of service, better 4G and 5G conditions, so technology advances, markets advance. Users will also have better conditions,” he said.

However, the Competitive Intelligence Unit director also pointed out that selling Telefónica Movistar represented a significant challenge due to the characteristics of its user base.

“In total there are 21 million users. Everything will remain the same or improve. Telefónica users are very low-consumption customers. The average user spends about 150 pesos per month; at Telefónica it’s very low, less than half at 70 pesos. They are very low-consumption, prepaid users. That’s why it was so difficult to sell that customer base—because it was very low consumption,” Piedras stated.

He added that the major challenge for OXIO will be adding business value to these users, which could occur through equipment sales via financing and offers to consumers.

What We Know About Movistar’s Exit from Mexico

In early November, Telefónica Movistar confirmed its exit from Mexico as well as markets including Chile and Venezuela as part of a simplification strategy. Subsidiaries in Argentina, Peru, Uruguay, Ecuador, and Colombia have already been sold.

“We are in three countries in Latin America—Mexico, Chile, and Venezuela—and in Colombia we are already in an advanced exit process. We will leave Latin America and the three countries are Mexico, Chile, and Venezuela,” said Marc Mutra, the company’s president, during a conference.

Movistar provides mobile telephone services including broadband and fixed connectivity with 4G and 5G networks, plus digital services for 72 million residential customers.

Telefónica was the first Spanish company to list on Wall Street in 1987 and is now evaluating a possible market exit as part of its strategy to simplify its business.