Mexico. A recurring theme when referring to the telecommunications sector is the requirements and intensity in the deployment and use of intrinsic network infrastructure. Among its characteristics, infrastructure capital has high investment amounts, low margins and slow profit returns, as well as long periods of maturation of its productive units.
These circumstances have historically and internationally translated into barriers to access and use of telecommunications under conditions of competition and free competition. With this, it is limited that its benefits and effects extend to the whole society and to all economic branches, in its dimension as 'indirectly productive capital'.
A characteristic identified in the country and in the telecommunications sector is the deficit of connectivity infrastructure that impacts the coverage and quality of its services. In addition, in perspective of states of the republic and their localities and municipalities, very marked differences are identifiable.
By sizing the coverage of the infrastructure of fixed fiber optic networks in the regional, state and municipal order, it is identified that a majority proportion of the Mexican population (54.9%) barely has access to the offer of only one telecommunications operator. In stark contrast to those municipalities with greater economic activity and a greater contribution to the national GDP, in which the supply can amount to three or more competitors.
Almost all of that 54.9% is the potential market exclusively served by the only operator with the largest coverage of fiber optic networks in the country, the preponderant (Telmex/Telnor). Undoubtedly, with measurable effects on competition in prices to the final consumer, quality of service and incentives for the development and extension of infrastructure into the future.
Under this competitive scenario, public policy and regulatory efforts that seek to eliminate barriers to entry and operation to current or incoming competitors stand out, as well as provide coverage to those areas still unattended. All this focused on materializing the Constitutional promise of achieving universal coverage and transversality of telecommunications in Mexico.
In this sense, the project to strengthen and effectively use the CFE's fiber optic network, the second network with the highest coverage in the country, is one of the routes to fulfill this task.
Another of the actions aimed at solving the difficulties faced by competing operators to acquire their own infrastructure consists of the obligation applicable to the preponderant to disaggregate their local network. In other words, it must lease the infrastructure of the last stretch of its fiber optic network to its competitors in the market.
These two ways base their logic on the generation of efficiencies by the effective use of the deployed infrastructure, as well as on the optimization in the exercise of capital resources. More importantly, they intend to achieve a scenario of effective competition on equal terms for the offer of services.
Faced with a scenario of coverage of fixed networks of competitors that does not approach even remotely the one that reaches the preponderant, the intentions of these measures must be recognized and their compliance and effective execution must be achieved. Since this will result in the fulfillment of the Constitutional mandate of democratization of the Internet service and the universal adoption of ICTs among the population, with the realization of its repeated direct and indirect effects on the national productive apparatus and consequently on the social welfare of all Mexicans.
Text written by Ernesto Piedras of The Competitive Intelligence Unit S.C.
