Background on AT&T’s Financial Health in Mexico
AT&T, a major telecommunications company, has shown financial improvement in Mexico after losing money from investors for a decade. This recent progress, however, may not be enough to risk participating in Mexico’s upcoming high-priced 5G spectrum auction, presenting a challenge for new regulatory authorities.
Key Financial Indicators
In the summer quarter, AT&T’s overall revenue increased by 7%, and its postpaid business grew by 14%. A crucial indicator, the EBITDA margin—which measures a company’s financial health—improved by 10.97% year-over-year between Q3 2024 and Q3 2025, reaching an overall level of 18.2% during the summer period.
This is AT&T’s best EBITDA margin improvement since Q3 2023. The company’s leadership must now decide if this progress justifies risking AT&T’s strength in external adverse projects, such as the upcoming 5G spectrum auction in Mexico, which will take place under a new regulatory framework and economic slowdown.
Macroeconomic Context in Mexico
The macroeconomic context in Mexico is not favorable for telecom companies to purchase radiofrequency bands without facing financial strain. In September, Mexico’s productive activity decreased by 0.6% annually compared to the previous month, following a 1.2% contraction in July. This suggests that Mexico’s GDP might have slowed down in Q3 2025.
Over nine months, the data does not support AT&T’s ability to invest in bands; despite their EBITDA margin rising to 19.0%, the company has experienced a 3% decrease in service revenue, a 0.6% drop in equipment sales, and an overall 2.1% decrease in total revenue. As of September 30, 2025, the year has not been favorable for AT&T despite a Q3 revenue of $1.095 billion, with service and phone revenues increasing by 7.9% and 5.8%, respectively.
“AT&T’s Financial Position”
José Otero, an analyst at ICT Development Consulting, stated: “Although the financial results show a slight improvement, we are talking about a company that barely generates 2 cents of profit for every dollar invested. AT&T remains somewhat distant from a financial solidity that would allow it greater maneuvering. This translates into a cautious approach when analyzing potential investments. The result is that it’s quite unlikely that the company will acquire blocks of radiofrequency bands during a new allocation process.”
“It’s very unlikely that AT&T will participate in the auction. The spectrum remains expensive, as rights have not decreased. Although the new telecommunications law anticipates the possibility of discounts for coverage, it seems that these would be for coverage models in remote and sparsely populated areas, corresponding to small operators,” added Elena Estavillo from Centro-i.
AT&T’s Spectrum Holdings
AT&T holds spectrum in the 2.5 GHz band for its 5G services and also possesses spectrum in the 3.5 GHz band, highly suitable for 5G. Although AT&T has expressed interest in 600 MHz frequencies for other product configurations, they are hesitant due to potential tax implications affecting their business significantly—paying only for this input accounts for 16% of all the money AT&T earns annually.
“AT&T has enough spectrum to continue growing, and although it could prepare with new frequency bands for long-term growth, the cost of rights remains a significant deterrent,” said María Elena Estavillo.
Auction Conditions and AT&T’s Strategy
“Everything will depend on the auction conditions: What will be the cost of concessions? If revenue generation is not prioritized, what coverage conditions and accompanying calendar will there be? The more aggressive the 5G deployment calendar in Mexico, the fewer incentives AT&T will have to participate in the process, leaning instead towards continuing its current 5G expansion strategy in areas where it anticipates a positive return on investment within an acceptable timeframe for the operator.”
AT&T’s current prudent financial strategy and return to non-essential radiofrequency bands for its business plan have allowed the company to grow in more stable revenue-generating segments, with postpaid services being the most promising vertical after adding 243,000 new net postpaid accesses and representing 27% of AT&T’s total customer base in Mexico by September.
“We have grown in customers, revenue, and profitability compared to the same period last year. We have also achieved seven consecutive quarters of positive operating income… Despite market challenges, these results reflect our accurate and solidly executed strategy; they also motivate us to continue focusing on transforming our customers’ experience to keep growing in Mexico,” the company stated.
Key Questions and Answers
- What recent financial improvements has AT&T shown in Mexico? AT&T’s overall revenue increased by 7% and postpaid business grew by 14% in the summer quarter. The EBITDA margin improved by 10.97% year-over-year, reaching an overall level of 18.2%.
- Why might AT&T be cautious about participating in Mexico’s 5G spectrum auction? The macroeconomic context in Mexico is not favorable for telecom companies to invest in radiofrequency bands without facing financial strain. Additionally, the high cost of spectrum and potential tax implications make participation unlikely.
- What spectrum bands does AT&T currently hold in Mexico? AT&T holds spectrum in the 2.5 GHz and 3.5 GHz bands, with the latter being highly suitable for 5G.
- How has AT&T’s postpaid service segment performed in Mexico? The postpaid segment has been a significant contributor to growth, with AT&T adding 243,000 new net postpaid accesses and reaching 27% of its total customer base in Mexico by September.
