Mexico. The adoption of 5G in Mexico represents a crucial milestone in the country's digital transformation, opening the door to a range of opportunities in key sectors such as telemedicine, distance education and industrial automation. Despite its potential and marked benefits, the implementation of 5G in Mexico faces a number of significant challenges.
As of the first quarter of 2024 (Q1-2024), Mexico has an accounting of 13.0 million mobile lines that use the 5G network, a figure that represents only 9.1% of the country's total. The slow and lagging adoption of this technology in Mexico can be attributed to several fundamental factors: limited coverage, less accessibility of compatible equipment, the scarcity of attractive commercial offers, and the lack of awareness about the advantages of 5G.
Coverage and Availability. One of the main challenges for the mass adoption of 5G in Mexico is coverage.
Currently, only 31.5% of the population has access to 5G networks, with Telcel leading coverage in 125 cities, followed by AT&T and Movistar with a presence in 47 and 38 cities, respectively.
These levels of coverage are insufficient to ensure that all Mexicans can benefit from the advantages of 5G. To improve this, significant investment in infrastructure and the availability of radio spectrum is essential, ensuring that both urban and rural areas have access to the grid. This through a restructuring of sectoral taxes and the elimination of regulatory barriers.
Equipment Accessibility and Compatibility. In Mexico, only 15% of the new equipment offered by mobile operators is compatible with this technology.
Although 5G smartphones have begun to be marketed since the end of 2021, mainly in the high-end segment, the cost reduction of this technology has allowed for greater accessibility. However, the most affordable equipment is in a price range that starts from $3250 pesos to $4,998 pesos, depending on the operator.
Attractive commercial offers. Commercial offerings also play a vital role in 5G adoption.
Telcel and Movistar have facilitated access to the 5G network to their users without imposing restrictions, with plans starting at $229 and $279 pesos, respectively. On the other hand, AT&T offers access to the 5G network only to its postpaid users, with plans starting at $299 pesos. Competition between operators is crucial to generate more attractive offers that incentivize consumers to migrate to 5G technology. For Mobile Virtual Network Operators (MVNOs) it is not yet possible to offer 5G services due to dependence on traditional operators' networks and the slow technological transition.
User Education and Awareness. An underestimated, but equally important factor is user education and awareness about the benefits of 5G.
In Mexico, 41.8% of mobile users are still unaware of this new technology. Informing consumers about the benefits of 5G, such as its high data speed, low latency, and ability to connect multiple devices simultaneously, is essential to encourage adoption.
The adoption of 5G in Mexico depends on a combination of factors: improved network coverage, greater availability and affordability of devices, attractive commercial offers, and an effective user education strategy. With strategic planning and collaboration between government, industry, and academia, Mexico can overcome these challenges and harness the potential of 5G to boost its economic development in the digital age.
5G technology not only promises to improve connectivity, but also to transform industries and services, making Mexico a more efficient, dynamic and competitive country. The transition to 5G is a unique opportunity to position Mexico at the forefront of technological innovation, as long as current challenges are effectively addressed.
Analysis by Ernesto Piedras of The Competitive Intelligence Unit, The CIU.
