A cooperation agreement signed between AT&T (NYSE: T) and América Móvil (NYSE: AMX) in November will first focus on leveraging the two companies' IP infrastructure before ramping up to offer other services like cloud computing, Roman Pacewicz, AT&T's business solutions senior VP of marketing and global strategy, told BNamericas.
Pacewicz said that while AT&T and América Móvil have had a cooperative relationship for 20 years, a more far-reaching agreement was merited given the growth opportunities AT&T is seeing outside the US in Latin America, the Middle East and Asia. AT&T signed a similar type of agreement with China Telecom at the end of November.
The executive said four key drivers were behind the new agreement with América Móvil - nearly all multinationals have operations in Latin America; economic growth levels are higher in the region than the global average; trade flow between Latin America, the Middle East and Asia is growing rapidly; and Latin American multinationals, known as multilatinas, are expanding outside of their home region.
For the last couple of years, AT&T has been working with América Móvil to expand and enhance its IP infrastructure in Mexico and Brazil, and the idea is to now extend that relationship region wide.
"The starting point of the relationship is virtual private networks (VPNs). And that is really what we're announcing - the ability to really leverage each other's IT infrastructure and set the foundation for business customers," Pacewicz said.
"Once that foundation is laid, there is the opportunity of leveraging each others' cloud capabilities and strategies, which is used as the next phase of the evolution of the relationship. At AT&T, we see a significant opportunity for the multinational firms with virtual private cloud."
"That is the ability to have a private network access, shared cloud infrastructure and the ability to augment the computing environments of these large firms. The base foundation of this is the IP network. The next evolution of that is the cloud infrastructure," Pacewicz said.
The executive said ensuring that América Móvil's infrastructure appears like AT&T's will require a level of integration, not just connecting them.
"We're aligning systems infrastructure. We're not only bonding networks. There are process investments. There's a go-to-market arrangement where we help each other from a commercial perspective to enhance our value proposition so it is a much deeper alignment and investment," he said.