Background and Relevance of Telmex
Teléfonos de México, commonly known as Telmex, is a significant player in the Mexican telecommunications industry. Once holding 65% of the fixed telecom market in 2014, Telmex’s market share has dwindled to 27% by early 2025. This decline raises concerns about the regulatory policies that have been in place for over a decade, affecting Telmex’s performance.
Financial Performance and Market Share Decline
In the first quarter of 2025, Telmex reported a net loss of 1,819.18 million pesos (approximately 92.5 million USD), a 2.15% increase in losses compared to the previous year. This financial struggle is not new, as Telmex has been experiencing losses for over twenty quarters. The reasons include special regulatory policies, competitive market dynamics, and internal factors related to its workforce.
The novelty lies in Telmex’s recent announcement that its market participation has been decreasing quarter by quarter, leading to a 27% national market share in fixed services in Mexico. This figure will likely serve as the basis for Telmex’s argument to modify the asymmetric regulation imposed on it by the regulator, especially considering the ongoing constitutional reform of the telecommunications legal framework in Mexico.
Market Landscape and Competitors
At the start of the year, Telmex became the second-largest national operator in terms of market share for fixed services, dropping from 65.1% in 2014 to 27% by early 2025. Grupo Televisa, through its subsidiaries Izzi Telecom, Sky, and Bestel, now holds 33% of the market with 25.5 million access accounts (5.6 million broadband, 8.3 million fixed voice, and 11.6 million video accounts).
Megacable holds around 20% of the market, while Totalplay accounts for 17%. Other smaller operators make up the remaining percentage.
Regulatory Policy and Future Implications
If the regulatory authorities acknowledge Telmex’s 27% market share, it would provide a strong argument for Telmex and its parent company, América Móvil, to request a rewrite of the specific regulatory policy that has been in place since March 2014. This policy forced Telmex to split into two entities and allowed third-party companies to use its fiber optic infrastructure for TV and video services, which Telmex is currently prohibited from offering.
Telmex will also use this opportunity to advocate for a telecommunications legal framework that regulates by sector and service rather than by economic group or traffic levels. The current regulation, while updated every two years for Telmex, still measures performance by economic group level and regulates based on traffic levels, revenue volume, and market participation by millions of users—a criterion where Telmex is no longer dominant.
New Regulatory Framework and Investments
Mexico announced in early 2025 that it would regulate telecommunications services and sectors, part of the new legal framework resulting from the federal administrative simplification constitutional reform that led to the abolition of the Federal Telecommunications Institute and its applicable legislation.
Meanwhile, Telmex reported investments of 3,931 million pesos (approximately 199.94 million USD) in network deployment during the first quarter of 2025. Telmex’s revenue for Q1 2025 was 28,205 million pesos (4.5% increase from Q1 2024), largely due to improved performance by Prodigy Infinitum.
As of March 31, 2025, Telmex’s total debt stood at 14,424 million pesos (a 28.1% reduction from the same period in 2024).
Key Questions and Answers
- What is Telmex’s current market share in fixed telecommunications? Telmex’s market share in fixed telecom services has dropped to 27% nationally.
- Why is Telmex’s market share decline significant? This decline raises concerns about the regulatory policies affecting Telmex’s performance and may prompt a review of these policies.
- Who are Telmex’s main competitors in the Mexican fixed telecom market? Grupo Televisa, through Izzi Telecom, Sky, and Bestel, is Telmex’s primary competitor with 33% market share.
- What changes does Telmex seek in the regulatory framework? Telmex aims for a more sector- and service-based regulation, moving away from the current economic group and traffic level measurements.
- What are Telmex’s recent financial performance and investments? Telmex reported a net loss of 92.5 million USD in Q1 2025 but invested 199.94 million USD in network deployment during the same period.
