Telefonica buys last 8% of Mexico unit

Spain's Telefónica Móviles has reached an agreement to acquire the remaining 8% stake of Telefónica Móviles México that it doesn't already own, the Spansh company announced this week.

That stake, held by partner Alejandro Burillo, is being purchased for about $210 million (U.S.). As a result, Telefónica Móviles now owns 100% of its Mexican subsidiary. Burillo will become a stockholder of the parent company of the Telefónica Group, and will stay on as a board member and strategic advisor to the company's Mexico operation.

The Mexican cellular market, with a penetration rate of around 43% at the close of 2005, has significant growth potential with market consensus forecasts suggesting that the penetration rate will be over 60% by the end of 2008 (nearly 70 million customers), according to Telefonica. The same forecasts imply that the Mexican market could generate service revenues of over 10 billion euros in 2008.