Telecom Lead America: Mexico’s lower house of Congress gave approval to a telecommunications reform.
Reuters says the broad approval threatens to loosen Carlos Slim’s grip on the phone market and broadcaster Televisa’s dominance of the airwaves.
Recently ITU Secretary-General Hamadoun I. Touré welcomed Mexico President Enrique Peña Nieto’s decision to restructure Mexico’s telecom regulatory frameworks that will help put broadband development at the top of the country’s national development agenda.
The bill, presented by the government on March 11, aims to boost competition in the telecoms sector by increasing foreign investment and giving regulators the power to force companies with a market share above 50 percent to sell assets.
Mexico ranks poorly across the board compared to neighbouring countries as a result of an unclear regulatory framework in which multiple bodies come together to create regulation, slowing down the process and often overlapping or conflicting one another.
Mexican telecoms markets are highly concentrated, and this has affected users’ uptake and ability to benefit from lower prices both in the fixed and mobile sectors, according to Ovum.
Mexico is a rank outsider compared to other Southern and Central American countries which generally have good levels of competition in mobile; concentration has also resulted in a recent slowdown in mobile penetration. The dominance of Telmex has not been adequately addressed by regulation so far, with the incumbent still holding a share of mobile subscribers close to 70 percent.
Recently, Luca Schiavoni, policy & regulation analyst at Ovum, said:
“While still at the proposal stage, the objective to create a stronger, more independent regulatory body is something the Mexican telecoms sector urgently needs, and directly addresses the problem of the lengthy and confusing regulatory process that the industry faces at present.”
According to Analysys Mason, telecoms retail revenue in Latin America (LATAM) will grow at CAGR of 3.3 percent between 2012 and 2017. Mobile services in Latin America will account for about 80 percent of this growth during the forecast period – increased usage of mobile handset data and mobile broadband services will boost mobile retail revenue at a 4.8 percent CAGR, while fixed retail revenue will grow at a 1.4 percent CAGR.
The main contributors to revenue growth during 2012–2017 will be mobile broadband (growing at a CAGR of 15.8 percent), mobile handset data (a CAGR of 12.6 percent) and fixed broadband (6.6 percent). These three service categories will account for almost 90 percent of the revenue increase during the forecast period.
However, voice services (mobile and fixed) are still predominant in LATAM – their contribution was about 60 percent of total retail revenue in 2012. The report forecasts that this contribution will decline to about 50 percent in 2017 because non-voice services will grow more strongly than voice.
The number of active mobile connections will also increase during this period, from 672 million connections in 2012 to 830 million by the end of 2017. The population penetration rate for connections will climb from 111 percent to 131 percent and Argentina, Brazil and Chile will be the most penetrated markets (above 150 percent in 2017).
Pix credit: Reuters
Arvind Krishna
editor@telecomlead.com