Holland & Knight Advises Telefónica on Wireless Infrastructure Deal with AT&T in Mexico

MEXICO CITY (November 27, 2019) – Holland & Knight advised Spanish telecom company Telefónica, S.A. in connection with an unprecedented wholesale long-term deal with AT&T in Mexico. The deal will allow Telefónica to use AT&T's wireless "last-mile" equipment – the final link of telecom networks that includes towers, antennas and fiber-optic cables – to deliver service to consumers. The deal closed on November 21.

While keeping its own core network and associated systems, Telefónica will continue to provide mobile services to its business and end customers throughout Mexico by means of AT&T's existing and future wireless infrastructure. Telefonica's customers will also benefit from future technologies, including 5G, when it is deployed by AT&T. After a three-year transition period, Telefónica will realize savings in the amount of $254 million dollars per year.

Holland & Knight provided legal, regulatory and antitrust advice to Telefónica on the transaction. The team advising Telefónica was led by Mexico City-based Partner Luis Rubio Barnetche and included Partner Octavio Lecona and Senior Counsel Blanca Luévano. They were assisted by Partners Emma Solaun, Lance Myers and Marisa Marinelli.

The deal required extensive analysis considering that Telefónica and AT&T are direct competitors in Mexico. Regulatory advice was also required since this is the first time a mobile operator has returned all of its spectrum holdings to the Mexican government on a staggered basis. The holdings are no longer needed since Telefónica's traffic will be carried on AT&T's radio access network. Holland & Knight also assisted with the drafting of the wholesale access services agreement, which was negotiated and executed within a three-week time frame.