Mexico’s telecoms market saw reasonable growth in 2007, with Telmex and Telcel continuing todominate their respective markets.
However, competition is gradually eroding the market share of thesetwo operators as the regulator introduces new rules on interconnection and introduces mobile numberportability (MNP) in Q208. MNP is expected to be completed within 30 days of the initial request. Thesesteps, as well as licensing MVNOs, should bring competition into the market following the MVNOlicence granted to fixed-line operator Maxcom in Q307. MVNOs should also boost penetration rates inthe country, which has fallen behind regional peers in terms of growth. In terms of regional rankings,Mexico is above only Peru for mobile penetration rates, and Peru is fast closing the gap.
Our latest telecoms report now includes an extended regulatory section which looks at regulatory bodiesand their responsibilities, as well as looking at competition laws and current issues in the regulation ofMexico’s telecoms market. We have also updated our Business Environment Rankings based on the latestdata available seeing some movement in the rankings with Mexico remaining in the middle of the table.We are maintaining our forecasts to 2012, although the introduction of MVNO licences and MNP shouldhelp to boost the market once they are brought into play and may see forecasts revised upwards.
Significant news in the market includes Telcel’s launch of 3G services in four Mexican cities, becomingthe second operator to offer such services after third-ranked Iusacell. Telcel announced subscribers hadpassed the 50mn mark in Q407, with the operator continuing to add the bulk of net additions. However,this has not been enough to stop the decline of the operator’s market share, which has seen consistent fallsin recent quarters. Movistar has taken much of this additional market share as Iusacell has failed to liveup to the promise shown after its merger with Unefon, seeing its market share fall in Q307 after seeing qo-q growth in 2006 and early 2007. Nextel remains the smallest operator but has also seen market sharereduce marginally as competition heats up between Movistar and Telcel.
Mexico’s fixed-line market has seen some growth, but all of this has been for alternative operators thathave taken market share from Telmex with bundled offerings. However, Telmex continues to lead in thebroadband market, where it is increasing the number of Infinitum ADSL customers far faster than it losesdial-up customers.
In November 2007, Telmex announced its intention to spin off its international units and páginasamarillas units into a new subsidiary, to be known as Telmex Internacional, giving the company thechance to concentrate on operations in its domestic market. Telmex Internacional will include alloperations in Argentina, Brazil, Chile, Colombia, Ecuador, Peru, Uruguay and the US. Domestically,Telmex will concentrate on markets where it faces competition and those where it does not separately.
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