Sprint and Teléfonos de México have decided to end their joint venture, which was created to offer telecommunications services to Hispanics in the U.S.

Telmex, Sprint joint venture falls apart
by Juan Carlos Pérez, IDG News Service, Latin America Bureau
May 05, 1999

FORT LAUDERDALE, FLA. - Sprint Corp. and Teléfonos de México (Telmex) have decided to end their Telmex-Sprint Communications LLC joint venture, which was created to offer telecommunications services to Hispanics in the U.S., the companies announced.

Telmex, which is México's dominant carrier, plans to buy Sprint's share of the company once the companies obtain the approval of the U.S. Federal Communications Commission. Each company currently owns half of the joint venture.

The companies reached an impasse when Telmex decided it wanted to broaden the venture's portfolio of products and services beyond the realm of telecommunications to include things such as money orders, a move that Sprint didn't support, Sprint executives told the Wall Street Journal this week.

Sprint will continue trying to cater to the Hispanic community in the U.S. on its own, and the companies plan to continue collaborating in other areas, the companies said in a statement yesterday.

In a related news, Telmex and SBC Communications Inc. announced this week that they plan to buy a Puerto Rican cellular operator, called Cellular Communications of Puerto Rico Inc., for US$814 million [M] -- $464 million [M] will be paid in cash, while the remaining $350 million [M] will be paid as a long-term debt.

The carrier, known as Cellular One, has over 330,000 subscribers and provides not only cellular phone service but also paging service. It operates in Puerto Rico -- a Caribbean Island that is part of the U.S. -- and in the U.S. Virgin Islands, the companies said in a statement. Cellular One plans to also offer fixed-line service to business customers.

The purchase, which needs to be approved by Cellular One shareholders and by regulatory agencies, is expected to be completed by the third quarter, the companies said.

Telmex, in Mexico City, México, can be reached at http://www.telmex.com.mx/. Sprint can be reached at http://www.sprint.com/. SBC can be reached at http://www.sbc.com/.

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