GTE, Grupo Financiero Bancomer and Valores Industriales (Unicom) file to provide local, long-distance and value-added telephone service in Mexico.

MEXICO CITY, Mexico -- Unicom Telecomunicaciones, a joint venture of GTE Corp., Grupo Financiero Bancomer (GFB), and Valores Industriales (VISA) yesterday filed for a license with the Mexican Ministry of Communications and Transport to provide local telephone service, domestic and international long-distance, and value-added services, such as high-speed data transmission, for businesses.

The joint venture could invest up to $900 million over the next 10 years to provide long-distance and value-added services, based on the current market situation and the resolution of certain regulatory issues. Bancomer and VISA will own 51 percent of Unicom with GTE holding the remaining 49 percent.

"With our capable partners, we can provide reliable, dependable telecommunications services to our neighbors in Mexico," said Bruce Haddad, senior vice president international-Latin America for GTE Corp. "We believe Unicom can play a large role in the growth of Mexico's economy by strengthening the country's infrastructure and making state-of-the-art telecommunications technology available throughout the country."

Customers To Benefit from Fiber-Optic Network

The group expects a license to be granted shortly which would allow Unicom to begin construction of a telephone network linking 60 cities. The network could be in service by 1997. Fiber optics will provide the backbone of Unicom's long-distance network, guaranteeing greater reliability and a lower cost for customers.

The value-added services will allow businesses to carry voice, video and data simultaneously over the same lines. Businesses also will be able to use frame relay service to transmit data at higher speeds, and GTE CentraNet service to maintain greater control over their internal telephone networks.

Ricardo Guajardo of GFB said, "When Unicom is granted a license, we can bring the most advanced communications systems to Mexicans -- systems that are critical to Mexico's success in the global market."

Unicom's plans for providing local services are incomplete until the Mexican government allocates spectrum, finalizes its regionalization plan and writes rules on how competing telephone companies will be able to hook-up with one another.

"We are excited about the tremendous opportunities in store for Mexico with the opening of the telecommunications market. I expect Unicom to set service quality records as well as introduce new products quickly," said Jose Antonio Fernandez of VISA.

GTE has more than 75 years of experience providing local telephone service in the United States and 40 years of international experience. GTE operates the Dominican Republic's telephone company, CODETEL, and has an interest in telephone companies providing local telephone or cellular service in Canada, Venezuela and Argentina.

GTE is the largest U.S.-based local telephone company and a leading cellular-service provider in the United States, with wireline and wireless operations that form a market area covering more than one third of the country's population. The corporation is the fourth-largest publicly owned telecommunications company in the world. GTE also is a leader in government and defense communications systems and equipment, aircraft-passenger telecommunications, directories and telecommunications-based information services and systems.

GFB was formed in 1992 and has almost (U.S.) $29 billion in assets. The company owns Bancomer, one of Mexico's largest retail banks. Bancomer serves all the national territory with the nation's largest distribution network based on its branch and automatic teller machines network. Other GFB subsidiaries include the brokerage house Casa de Bolsa Bancomer; two leasing companies, Arrendadora Bancomer and Arrendadora Monterrey; the factoring company Factoraje Bancomer; and others.

VISA is a major Mexican industrial group which, through its main subsidiary FEMSA, has interests in beverage manufacturing, convenience stores and packaging materials. The company had revenues of more than (U.S.) $2.8 billion in 1994. FEMSA's subsidiaries include Cerveceria Cuauhtemoc y Moctezuma; Coca Cola FEMSA; Oxxo convenience stores; and a packaging division.

GTE's Presence in Mexico

Unicom Telecomunicaciones, S. de R.L. de C.V.

  • Unicom was formed by an alliance between U.S.-based GTE Corp., Grupo inanciero Bancomer (GFB) S.A. and Valores Industriales, S.A. (VISA), both Mexican companies.

  • The alliance was announced in September, 1994, and was formalized on March 1, 1995.

  • Bancomer and VISA will contribute 51 percent of Unicom's capital, with GTE raising the remaining 49 percent.

Over the next 10 years, Unicom could invest up to $900 million to provide domestic and international long-distance and value-added services in Mexico.

GTE Data Services

GTE Data Services will establish a Mexican subsidiary that will operate a $27 million state-of-the-art data-processing facility and a main office. The data processing center will run computer applications and process data for Mexican business customers who want to outsource those functions. The office in Mexico City will provide sales, marketing and consulting information.

GTE Airfone

Aerocomunicaciones, a joint venture between GTE Airfone and Telefonos de Mexico, S.A. de C.V., offers in-flight telephone service to commercial air travelers over Mexico.

GTE Telecommunication Services

GTE provides cellular-billing clearinghouse services to Mexico's cellular carriers. GTE is working with cellular carriers in Mexico and throughout Latin America to fight fraud, improve operational efficiencies and provide call delivery services to their customers.

Current Conditions in Mexico

  • Population - 90 million people.

  • Half of the country's citizens are under 20 years of age.

  • Fewer than 10 phones lines per 100 people compared with 57 lines per 100 inhabitants in the United States.

  • The one-time installation fee of several hundred dollars makes telephone service prohibitive for some.

  • The average telephone service fee is $10 a month for a maximum of five local calls a day.

  • Potential long-distance revenue is estimated at $4 billion a year with a potential 15 to 20 percent annual growth rate.