Telefonica (News - Alert), one of the largest telecommunications companies in the world in terms of market capitalization and number of customers, and NII Holdings, a provider of differentiated mobile communication services for businesses and high value consumers in Latin America, have signed agreements to provide wholesale voice and data services to Nextel in Brazil and Mexico.
The agreements significantly expand Nextel's voice and data coverage in Brazil and Mexico using Telefonica's networks, while increasing the efficiency of infrastructure investments for both parties.
As part of the pacts, both companies will work closely to implement the agreements as soon as possible.
Thanks to the pacts, Vivo, Telefonica's commercial brand in Brazil, will now be able to more efficiently deploy its network while providing Nextel with access to a broader service area across Brazil.
Nextel Brazil will continue to expand its own network while complying with the regulatory coverage requirements imposed by the Brazilian Telecommunications Regulator.
The commercial agreement will allow Movistar, Telefonica's commercial brand in Mexico, to leverage the capacity already deployed in its 3G network and will provide another lever for strengthening its wholesale strategy in the country.
Besides this, it will allow Nextel Mexico to expand its network footprint beyond its current coverage.
"The agreement allows both companies to capture the benefits derived from the optimization of infrastructure investment while maintaining the current market structure in both Brazil and Mexico," said Santiago Fernandez Valbuena, chairman and CEO of Telefonica Latin America, in a statement.
Valbuena said that it is another example of Telefonica's effort to optimize resource usage, improve profitability of the businesses and increase financial flexibility.
“Our new agreements with Telefonica will enhance our service offerings by giving us the ability to provide our 3G customers in Brazil and Mexico with services in more areas in those markets,” said Steve Shindler, chief executive officer, NII Holdings (News - Alert)'.
“Our access to Telefonica's networks under these agreements will also allow us to utilize Telefonica's networks as we continue to expand our own coverage footprint to provide our customers with service that meets their needs,” said Shindler.
The agreements reached with Nextel are in line with other announcements that Telefonica has made in recent months.
Edited by Cassandra Tucker