Having already bought Iusacell in Mexico earlier this year, AT&T completed the acquisition of Nextel for $1.88 billion, and will merge the two operators, putting it in a stronger position to challenge America Movil, the country’s dominant force.

“AT&T has completed its acquisition of companies operating under the name Nextel Mexico from NII Holdings Inc., including spectrum licenses, network assets, retail stores and subscribers in Mexico, for $1.875 billion, less approximately $427 million of net debt and other adjustments,” the company said in a statement.

“AT&T will integrate Iusacell and Nextel into one company focused on bringing more choices, better service and faster mobile Internet speeds to more locations throughout Mexico,” it added.

According to GSMA Intelligence figures, Nextel and Iusacell together ended 2014 with 11.6 million connections, giving a market share of around 11 per cent. The market is dominated by America Movil’s Telcel (70.9 million) and Telefonica’s Movistar (21 million).

The company said it wants to create the first-ever North American Mobile Service area, which will cover more than 400 million consumers and businesses in Mexico and the US.

Thaddeus Arroyo, CEO for AT&T Mexico and Iusacell, will head the combined company.

The operator believes Mexico’s economic strength and ties to the US make it an attractive place for investment.

AT&T’s acquisition of Nextel Mexico was approved by the US Bankruptcy Court for the Southern District of New York and Mexico’s telecom regulator Instituto Federal de Telecomunicaciones (IFT).

“Swift action by IFT, aided by recent regulatory reform by the Mexican government, has created a positive climate for AT&T to invest significantly in Mexico,” it said.