Mexico. According to The Competitive Intelligence Unit, CIU, the fifth Government Report has ceased to be an event of caudillista litigation, to become a healthy exercise of accountability with citizens and reporting progress on the achievement of the objectives and lines of action of the National Six-Year Development Plan.
In its quantitative dimension referring to the telecommunications sector, the Report reports the numeralia related to investment, an essential factor for sectoral development, but above all for the fulfillment of the objectives of the Constitutional Reform in terms of coverage, quality and democratization of services.
On the public investment side, the 5th Report of the present administration reports an exercise of $1,634.9 million pesos during 2016, mainly applied to the development of the Mexico Conectado program, which seeks to contribute to reducing the digital divide by bringing connectivity to various public places such as schools, hospitals, libraries and other spaces. As of June 2017, it is reported that the program reached the installation of 101,322 sites, with a density of at least one in 99% of the country's municipalities.
However, the amount of resources exercised last year was significantly lower, 68.5% lower compared to the 2015 figure and equivalent to only 35% of the average made in the previous three years. The expectation is that at the end of the year an exercise of $1,773 million pesos will be completed, with which public investment will increase scarcely by 8.4%, compared to the amount of 2016.
It is desirable that this containment of government resources destined to the capitalization of the sector be put to an end, since they induce the stagnation of projects that seek to contribute to the development of activities of private economic agents and, of course, guarantee the right to access to telecommunications and ICTs, recognized in the Constitution since the Sectoral Reform.
In stark contrast, it is striking that reported investment from private initiative has followed an upward trajectory in the last two years. In this sense, telecommunications service providers exercised an amount of capital or investment additions that amounted to $85,080 million pesos at the end of last year, this is 16.5% more than in 2015 and 1.4 times more than the average made in the previous three years.
The main factor that explains this increase in the exercise of resources for the development of infrastructure from the private sphere lies in the incentives and willingness of competing operators to renew and strengthen their networks, especially those of fixed and mobile broadband, in order to reduce costs, increase their coverage and achieve efficiencies in the provision of services.
It is from these investment actions that a remarkable growth in access to mobile broadband is identified, in terms of subscriptions per 100 inhabitants. According to the 5th Report, the coefficient went from 21 to 63 subscriptions per 100 inhabitants, from the beginning of this administration to the first quarter of 2017.
Indeed, with the promotion of the exercise of investment resources in telecommunications infrastructure, these mandates of coverage, quality and universal access to telecommunications will materialize. For this reason, the regulator must ensure the effective implementation of the necessary mechanisms to encourage private investment, especially from competing operators, which have detonated their exercise of capital resources in infrastructure in recent years.
Text written by Ernesto Piedras of The Competitive Intelligence Unit S.C.
