Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Thursday, November 03, 2016

Telecommunications and Broadcasting Map in Mexico 2016

The results of the reforms is already seen in the day-to-day of the market

Telecommunications and Broadcasting Map in Mexico 2016 - Credit: © 2016 Convergencialatina
Telecommunications and Broadcasting Map in Mexico 2016 - Credit: © 2016 Convergencialatina

Three years of the Constitutional Reform amending the regulatory framework for telecommunications and broadcasting sector passed, but only begin to see results in the market this year. The dominant position in hands of América Móvil and Televisa -as can be reflected in the Telecommunications and Broadcasting Map in Mexico 2016- is, perhaps, the axis on which its application has been slower and, in addition, full of controversies.

According to data of the Federal Telecommunications Institute (IFT, for its Spanish acronym)  for the second quarter of 2016 the preponderant economic agent (PEA) in telecommunications, América Móvil, holds 66.4% of the mobile market (69% in 2014), 62% of fixed telephony (71% in 2014) and 57.6% of fixed broadband (60% in 2014). While in the AEP in broadcasting, Televisa, concentrates 60% of total pay TV accesses, the same percentage that it had two years ago.

On the other hand, it is true that we can mention two aspects where the impact of the reform was greater. One of them is the remarkable drop in rates: while in the past two years inflation had a growth rate of around 10%, prices of telecommunications decreased by over 20%. With the elimination of domestic long distance, prices for international long distance fell 40%, and of mobile telephone rates by more than 32%.

Conversely, some of the large projects such as the bidding for the Shared Network and the third national broadcast television network start materializing. The competition for the network to operate the 90 MHz in the 700 MHz band in the form of Wholesaler has promoted an alliance between Megacable and Axtel, which constituted along with five other firms one of the participating consortiums. Another competitor is the Irish consortium Rivada Networks and Spectrum Frontier. In the case of the television network, Imagen TV is already a reality, launched in October, when it began broadcasting, and has already begun to steal rating points to Televisa and TV Azteca.

The more competitive environment has also allowed AT&T to consolidate, to unify its brand and wants to -in the short term- overcome the barrier of 10 million users in the country, and migrate its customer base to 4G. With the announcement of purchase of Time Warner, AT&T would incorporate its own content networks, something that Televisa already does with Blim and America Movil's Claro Video. However, the advance of AT&T makes the subsidiary of Telefónica question its initiatives, which this year changed its top management to join the overall digitization strategy promoted by Spain and break the deadlock in the Mexican market.

This year, the map has new market participants, as Simpati Mobile, the MVO dedicated to the female audience that launched services in August, and StarGroup, satellite communications operator that during 2016 started providing DTH and satellite broadband services. In addition, the map also displays the mergers in the sector, such as Axtel with Alestra, and the global: Dell with EMC, and Nokia with Alcatel-Lucent.

 

 

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