Background and Relevance
The new mobile telephony registry in Mexico aims to support crime prevention efforts. The infrastructure cost for this initiative is estimated at 4,053 million 652,389.40 Mexican pesos, equivalent to approximately $220.7 million USD. Initially, telecommunications companies will absorb these costs, which will eventually be passed on to end-users through their service plans.
Financial Implications for Telecom Companies
Not all telecom operators have strong financial margins to absorb such operational costs without affecting consumers. These expenses will require significant financial allocation, which companies must recover, potentially through increased plan prices or reduced data allowances. This situation has been demonstrated previously when a major wholesale operator unilaterally raised reference offers for retail operators, causing disruptions in their service portfolios and affecting end-users.
Investment Responsibilities
Major wholesale operators will primarily invest in the new infrastructure, although smaller retail operators like mobile virtual network operators (MVNOs) will also incur costs. Isabel Reza, the General Director of Regulatory Experts: Telecommunications and Broadcasting, notes that larger operators may better absorb these impacts due to their financial strength.
Market Barriers and Competition
There is a risk of creating market barriers, particularly in the mobile segment. Larger operators have broader financial margins to finance such infrastructure compared to smaller operators with fewer customers. Carolina Cabello, a senior consultant at Regulatory Experts: Telecommunications and Broadcasting, warns that these cost increases could lead to barriers for entry for smaller operators and stifle service innovation.
Financial Capabilities of Major Operators
Telcel, with its robust EBITDA margin of 41.4% in March 2025, is best positioned to handle these financial impacts. Its average monthly revenue per user (ARPU) is the highest in the sector, at 186 pesos, compared to AT&T’s 146 pesos. The minimum acceptable EBITDA margin for a company to avoid risk is 27%, but Telcel leads with 41.4%, followed by AT&T at 18.2% and Telefónica at 9%.
Impact on Retail Operators
Although major wholesale operators will primarily bear the investment burden, retail operators will also experience some impact. Altán Redes, Telcel, and AT&T are the primary wholesale operators in Mexico, supporting the majority of traffic generated by 156 million cellular lines expected in 2025.
Telcel and AT&T are privately-held companies, while Altán receives state funding, making it crucial to consider potential market distortions or negative effects with the new registry implementation.
Competition Neutrality
Carolina Cabello emphasizes the importance of competition neutrality. If Altán, a state-backed company, invests differently from privately-held Telcel and AT&T, it could create an uneven playing field. Altán should ideally finance these initiatives through its own operations, considering its existing challenges.
Key Questions and Answers
- What is the estimated cost of the new mobile telephony registry in Mexico? The estimated cost is approximately $220.7 million USD.
- Who will initially absorb the costs of this new registry? Telecommunications companies will initially cover these expenses.
- How might consumers be affected by these costs? Consumers may face increased plan prices or reduced data allowances as companies recover these costs.
- Which operators are primarily responsible for the new infrastructure investments? Major wholesale operators, such as Altán Redes, Telcel, and AT&T, are primarily responsible for these investments.
- What risks could arise from this initiative? Market barriers, reduced competition, and potential distortions in the telecom market are possible risks.
- How financially prepared are major operators to handle these costs? Telcel, with its strong EBITDA margin and high ARPU, is better positioned to absorb these impacts compared to other operators.
- Why is competition neutrality important in this context? Ensuring a level playing field among operators, especially with state-backed and privately-held companies, is crucial for a fair and competitive telecom market.
