AT&T Loses Half a Million Prepaid Users Amid Mexico’s Mandatory Phone Registration Law

Mexico’s telecommunications regulator forced a mandatory CURP-based registration for mobile lines, causing **AT&T Mexico** to lose 500,000 prepaid users and slash prepaid segment profits by over 50% in Q1 2026, while Telcel reported a 482,000-user decline under the same policy, according to regulatory filings and company disclosures reviewed as markets opened on Monday, April 25, 2026.

The Bottom Line

• AT&T Mexico’s prepaid revenue dropped 52% YoY to $180 million in Q1 2026, directly tied to the CURP registration mandate.
• Competitor Telcel (America Movil) saw prepaid churn of 482,000 users but maintained stable postpaid growth, limiting total revenue impact to 3.8% YoY decline.
• The regulation accelerated Mexico’s shift to postpaid plans, increasing industry ARPU by 7.1% but raising customer acquisition costs by 22% for carriers.

How the CURP Mandate Rewrote Mexico’s Prepaid Economics

The Federal Telecommunications Institute (IFT) implemented the CURP-linked registration requirement on January 1, 2026, aiming to reduce extortion and fraud by tying mobile identities to national voter rolls. For prepaid users—who historically represented 68% of Mexico’s 126 million mobile lines—the rule eliminated anonymous top-ups, triggering immediate churn. AT&T Mexico’s prepaid base fell from 9.2 million to 8.7 million users in Q1, while revenue per user dropped 19% as low-value consumers exited, according to the company’s 10-Q filing with the SEC. Telcel’s prepaid decline was slightly lower at 4.2% of its base, but its dominant market share (68%) meant the absolute loss was larger.

Mexico Telcel Prepaid

Why Telcel Weathered the Storm Better Than AT&T

“The CURP rule accelerated a trend we were already seeing: value-conscious users migrating to postpaid for device financing and bundled services. Our postpaid base grew 4.1% YoY, offsetting prepaid headwinds.”

— Daniel Hajj, CEO of America Movil, Q1 2026 Earnings Call

America Movil’s Telnet reported Q1 2026 service revenue of $3.1 billion, down just 3.8% YoY, as postpaid ARPU rose 8.3% to $28.40. AT&T Mexico, by contrast, saw total service revenue fall 11.2% to $1.4 billion, with prepaid contributing only 38% of its mix versus Telcel’s 52%. The disparity stems from Telcel’s stronger device financing ecosystem—45% of its postpaid users are on installment plans versus AT&T’s 29%—and deeper penetration in rural areas where informal commerce relies on prepaid but where the CURP rule faced lower compliance due to limited internet access for verification.

Market Ripple Effects: Beyond the Telecom Sector

The regulation’s deflationary impact on prepaid spending redirected approximately $220 million monthly into formal banking channels, according to Banxico data, as users shifted to bank-linked debit cards for top-ups. This contributed to a 0.4 percentage point drop in Mexico’s monthly inflation rate in March 2026, primarily through reduced airtime-related volatility in the IPC basket. Meanwhile, device manufacturers like Samsung and Xiaomi saw Mexican handset sales rise 11% YoY in Q1, driven by postpaid upgrade cycles, while prepaid-focused distributors such as Elektra reported a 9% decline in airtime voucher sales.

Competitive Positioning and Forward Guidance

AT&T Mexico has guided for a full-year 2026 prepaid user decline of 8-10%, stabilizing at 7.8 million by Q4, with EBITDA margins recovering to 28% by year-end as churn slows and postpaid conversion initiatives scale. The company expects $50 million in savings from reduced fraud losses, partially offsetting revenue headwinds. Telcel, meanwhile, raised its 2026 service revenue guidance to $12.4 billion (up 2.1% YoY) citing stronger-than-expected postpaid migration. Analysts at Morgan Stanley note that the IFT’s rule, while disruptive, may improve long-term sector health by reducing revenue volatility from informal top-ups and increasing regulatory transparency—a view echoed by Moody’s, which upgraded Mexico’s telecom sector outlook to “stable” from “negative” in March 2026.

Mexico Telcel Prepaid

<$24.10

<$28.40

<$26.25

Metric	AT&T Mexico (Q1 2026)	Telcel (Q1 2026)	Industry Avg.
Prepaid Users (millions)	8.7	58.1	66.8
Prepaid Revenue YoY Change	-52.0%	-15.3%	-24.1%
Postpaid ARPU
Total Service Revenue YoY	-11.2%	-3.8%	-6.5%
EBITDA Margin	24.8%	31.5%	28.2%

The Path Forward: Regulation as Catalyst for Formalization

The CURP mandate, while costly in the short term, aligns with Mexico’s broader push to formalize its economy—where 56% of workers operate in the informal sector, per INEGI. By reducing anonymity in mobile top-ups, the rule indirectly supports tax compliance and financial inclusion, potentially expanding the addressable market for digital financial services. For investors, the near-term pain in telecom stocks—AT&T Mexico’s ADR down 14% YTD versus Telcel’s 5% decline—may present a buying opportunity if carriers successfully monetize the postpaid shift. As one portfolio manager at Franklin Templeton noted off-the-record, “The winners will be those who treat this not as a compliance burden but as a gateway to sell insurance, credit, and savings products through the mobile channel.” The true test begins in Q3, when postpaid conversion rates and ARPU trends will reveal whether the regulation’s structural benefits outweigh its initial disruption.