In November last year, President Andrés Manuel López Obrador (AMLO) announced an Infrastructure Plan with investments of US$ 44 billion. The plan, which aims to develop private investment mainly in tourism and transport sectors, responds to the slowdown in Mexican GDP, which after a decade of growth registered a 0.1% decline in 2019.
The plan includes projects for US$ 4.3 billion in the area of ??telecommunications, an amount that, if fulfilled, will more than exceed about US$ 2.8 billion in 2019, a figure in decline when compared to the US$ 3 billion in 2018 and US$ 3.2 billion in 2017, according to IFT figures.
However, the uncertainty of policies for the sector during the first year of AMLO's government puts a cape on the optimism that the government intends to spread with the announcements. Although AMLO proposed to achieve total connectivity and financial inclusion as axes of its administration, in 14 months of management at the beginning of the year the guidelines of the National Digital Strategy (EDN) to promote digital banking were known, as well as the Roadmap of CFE Telecomunicaciones, after months of marches and counter-marches around the role that the State will play in the provision of services.
The goal of the EDN in terms of financial inclusion is to channel all financial aid and consideration to the beneficiaries of all social programs of the Federal government through the Banco de Bienestar, which is based on the opening of 2,700 physical branches but mainly in the electronic, online and mobile banking operations. Currently, in Mexico, only 10% of the population performs banking operations on the Internet, according to the National Survey of Financial Inclusion (ENIF) 2018.
But a good part of EDN’s plans, which also includes a new version of the National Digital Agenda, depends in large part on how much the CFE Telecomunicaciones plans advance, which requires a radical change from what happened since the arrival of AMLO: in his first year, the new government launched the tender for 25,000 kilometers of dark fiber that the Federal Electricity Commission (CFE, in Spanish) has in its lines. But in the middle of the road, the Ministry of Communications and Transportation (SCT, in Spanish) canceled the tender to create CFE Telecomunicacionese Internet para todos, the state energy subsidiary that will take over the plans to close the digital divide.
An ambitious goal, considering that AMLO had a budget of US$ 56 million for this year is to reach 10,000 free Internet access points, a sum notoriously lower than the approximately US$ 680 million that Telmex invested in 2019.
In any case, CFE Telecom is just one more pillar that, in the absence of a strategic plan, is added to projects with greater or lesser state intervention (including the creation of the corresponding government agencies), such as Mexsat, México Conectado or its own Red Compartida, managed by Altán Comunicaciones. In that sense, private participation will be a key support for the operation of CFE Telecom. In his eagerness to be friendly with the business, AMLO had a somewhat fortunate approach to Facebook in order to bring the giant to invest in networks, a move criticized by the lack of clarity in conversations with the company.
But beyond the anecdote, the call to the private sector is the order of the day, with name and surname. Buried the conflict that broke out when AMLO canceled the completion of the New Mexico International Airport (NAIM), Carlos Slim has already turned that page of history. The most powerful businessman in Mexico is willing to play near AMLO, as in the old days when the now most popular president of the last decades was mayor of Mexico. Particularly in public works. In December, Slim said he would invest up to 5% of GDP in public works if the 4% growth to which AMLO aspires with its infrastructure plan is achieved. Plan in which Slim himself intends a leading role for Carso Infraestructura y Construcción (CICSA), after three years of falls in business as a result of uncertainty over the renegotiation of the FTA with the United States and Canada, but also for having lost ground in front of competitors like OHL (already popularly known as “Peña Nieto's favorite construction company” for its links with the former president, for which he was criminally denounced).
In telecommunications, Slim also expects AMLO to recover lost ground: América Móvil's investments went from representing 43% of the total in 2016 to 27% in 2018.
But the validity of discussions in the regulatory agenda on issues such as the entry of América Móvil into the pay-TV market, the revocation of Telmex's functional separation (from its fixed telephony and Internet and long distance businesses) and the resolution in the Court of Appeals on the differentiation of Telcel tariffs between internal traffic of its network (on-net) and the traffic of its competitors (off-net), cross the sector's view of the Slim-AMLO relationship.
Even, the elimination of the preponderance figure of the Constitution, incorporated in the 2013 reform, which establishes an asymmetric regulation for América Móvil could be debated. The review of Telcel's tariffs by the Court and the second biannual review of preponderance measures taken by the IFT for América Móvil will be the first scenario to decide how much support AMLO will have from Slim.