The two major telecom operators in Mexico – fixed Telmex and mobile Telcel -, which together generate two-thirds of industry revenue, contribute less than one third of the investments. In a recent analysis, the local consulting and market research firm Competitive Intelligence Unit (CIU) pointed out that low levels of investment are primarily attributable to the main operator, which holds 77% of fixed lines and books 28.2% of total telecom revenues in the country. That carrier’s investments represented just 16.5% of capital invested in telecommunications in 2011.
Related to mobile, CIU noted that the leading operator’s investments totaled 14.3% of total investments in the sector. The biggest mobile operator Telcel owns 70.2% of total mobile lines, with 69% of its revenue coming from mobile service.
Carlos Slim owns the leading mobile and fixed-line telecom operators.
CIU also pointed that the highest level of investments (almost US $6 billion) was made back in 2001 there were spectrum auctions. Since then the telecom sector has never reached the same level. The Mexican consulting and market firm labeled this a failure of current telecom model, although CIU noted the 2009 decrease (to about US $3 billion) occurred due to the macroeconomic downturn that was experienced globally.
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In 2011, the investments in telecommunications totalled US $4.735 billion.
CIU explained that the scenario has changed since the beginning of the 2000’s decade, when the joint investment of the two main operators (fixed and mobile) accounted for 62% of the Mexican telecommunications sector, while in 2010 this value was reduced to just under a quarter of the total investment and, in 2011, to 31%.
The other operators’ share increase reflects a change in trend: while the main operators have stopped investing, competitors are struggling to fill a place in the market. This results in increased competition. However, CIU pointed out that it would only be strengthened by government measures that encourage the development of telecommunications infrastructure by encouraging investment.
According to the country’s telecom regulator Cofetel, the mobile subscriber base grew 9.9%, climbing to 97.1 million subscribers with the addition of 1.4 million new subscribers in the third quarter. Cofetel attributed the growth to a decrease in interconnections rates. Mobile teledensity reached 86.4 lines per 100 people.
In the period, fixed telephony decreased 0.2%, accounting for a total of 19.7 million in the January-September period. Fixed teledensity was 17.6 lines per 100 inhabitants.
