Nearshore Americas

Mexico Plans its Own Telecom Network to Break Slim’s Monopoly

Mexico’s federal government has decided to launch its own mobile network in a bid to break the monopoly of Carlos Slim’s America Movil and to create a level playing field for other telecom operators in the country.

The aim is for the new telecom network to be up and running by 2018. The news has pleased European telecom gear vendors such as Ericsson and Alcatel Lucent, both of whom are reportedly preparing to bid for the project.

Reducing telecom prices is an essential aspect of the Mexican government’s plans to create a digital economy and generate more jobs for the growing number of ICT professionals.

New telecom regulations in the country require America Movil to limit its market share to 50%. Rumors are also circulating that AT&T might expand into Mexico by purchasing a small chunk of Slim’s telecom assets.

AT&T has gained a foothold in the Latin American telecom market by acquiring DirecTV, which provides mobile broadband access in Brazil and Argentina.

Analysts say rolling out a new network and renting it out for operators will boost competition and dramatically cut telecom prices. Such an action would also lure new mobile virtual network operators (MVNOs) into the market, besides allowing smaller players, like Movistar and Iusacell, to bolster their positions with little investment.

In September, Mexico set aside another US$227 million to build what it called a “stronger fiber optic cable network” and a satellite system.

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“Mexico’s telecoms regulator and the telecommunications and transport ministry (SCT) agreed on terms and conditions for the development of the network in a first step toward launching it,” the regulator said in a statement.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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