Mexico. The operation and dynamics of the Information and Communication Technology sector depend on technology, regulation and the market. However, the national and international political cloud also influences sectoral performance, often even more than we might anticipate.
There we must locate the geopolitical factor, understood as the geographical and historical ties that determine international political behavior, and the global stability/instability that ultimately affect the production function of ICTs.
Today, the trade and political crises between China and the US are a complex illustration of the geopolitics of ICT. The juxtaposition of trade and political tensions is at a stage where the use of Chinese technology for infrastructure development, provision and use of telecommunications services is being restricted. Between issues of possible violations by Huawei of the sanctions imposed on Iran and security problems of its telecommunications equipment, the use of Chinese technology for network deployment, particularly for the installation of 5G, has been banned in countries such as New Zealand, the United Kingdom and Australia.
This responds to the strategic nature of the technological race, not only in economic terms due to the potential change in production chains and consumption derived from 5G, but also for its military, security and national sovereignty applications.
The case of the United Kingdom is striking, where the british telecom company announced the withdrawal of Huawei components from the 3G and 4G network of the newly acquired EE Limited, which promised not to include parts of the company within its infrastructure for 5G. On the contrary, Germany has positioned itself on huawei's side by pointing out that there is no evidence so far of security risks in its technology and bets on Chinese developments for cybersecurity projects.
On the other hand, Huawei is committed to becoming the main supplier of 5G devices not only in China, but in a large part of the main markets of the world. While the distrust in that company can benefit other technology companies such as Cisco, Ciena, Ericsson and Nokia for the deployment of 5G, its technological lag of 12 to 18 months that does not allow them today to compete simultaneously and frontally with their Chinese competitors is striking.
Possible Geopolitical Implications for Mexico
From the geopolitical point of view, a dilemma is glimpsed for Mexico in the reference of those powers. On the one hand, with a deep economic agreement with the US, while, on the other, a notorious penetration of Asian infrastructure and equipment.
With the negotiation of the USMCA, the relationship between Mexico and China, in terms of investment, becomes problematic due to the commitment of the parties not to sign trade agreements with countries that are not market economies. At the same time, the incoming government reveals intentions to strengthen its relationship with China, in terms of partner for priority projects such as the Mayan Train, in addition to the already existing participation in private mobile networks and in the Shared Public Network project.
Within the geopolitical chess and with the winds of political transition, Mexico will have to mediate or decide between the volatile détente with the United States and the national interest for the benefit of ICT development and its technological infrastructure.
All this at a decisive moment for the future technological and economic development of the country.
Text written by Ernesto Piedras of The Competitive Intelligence Unit.
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