The Mexican government has recently confirmed plans to launch its own national mobile network in order to promote competition among telecommunications operators in the country.
Currently the telecom industry is dominated by America Movil, owned by business tycoon Carlos Slim, as identified by Mexico’s Federal Telecommunications Institute (IFT) and reported by Nearshore Americas.
Telmex, America Movil’s wireline division, controls about 80 percent of the market in Mexico, whereas its wireless division Telcel (News - Alert) controls about 70 percent. New regulations from the IFT will limit telecom companies to a maximum market share of 50 percent and impose a few other stringent measures, such as prohibiting America Movil from charging national roaming fees. Additionally, the company will be required to share its infrastructure with other operators, particularly in the local loop segment, and the IFT will closely monitor interconnection fees.
Those working on the project hope it will significantly help smaller vendors gain a foothold, who can then use the state-owned network to provide wireless coverage and avoid the immense capital necessary for developing a new infrastructure. The resultant competitive market will greatly reduce the prices of telecom and broadcasting services for the public.
The government hopes to have the network up and running by 2018, with the vendor selection process to be completed by mid-2015. Several telecom vendors, including Ericsson (News - Alert) and Alcatel Lucent, have already submitted bids for the project which is valued at over $10 billion.
America Movil has formed a committee to assess the impact of the upcoming regulations and search for opportunities to divest parts of its assets and maintain compliance. The company is reportedly negotiating with several foreign telecom giants including AT&T, Bell Canada (News - Alert), China Mobile Ltd. and SoftBank Corp.
The Mexican government and the country’s telecommunications and transport ministry have reportedly agreed on terms and conditions for development of the project, and are taking the first steps toward launching it.