Background and Relevance
In Mexico, micro operators are advocating for a government-funded subsidy program similar to the US Lifeline initiative. This proposal aims to help low-income Mexicans choose their mobile service providers from a selection of brands offering diverse value propositions. The micro operators, comprising providers and creditors of the Federal Electricity Commission (CFE), have gathered to discuss strategies for addressing CFE’s outstanding debts and enhancing internet connectivity through innovative uses of passive infrastructure, such as telecommunication towers.
Key Players and Their Roles
The meeting included leaders from the Mexican Association of Virtual Mobile Operators (Amonvac), the Independent Telecommunications Association of Mexico (ATIM), the National Association of Wireless Internet Service Providers (Wisp Mx), and representatives from five tower companies. These firms aim to collaborate with the government to establish connectivity in remote areas, leveraging their extensive portfolios of 3,000 towers and hundreds of kilometers of fiber-optic cables in hard-to-reach zones.
Government’s Role and Intentions
A representative from the Mexican government, who hopes to be confirmed in their position, attended the meeting to express the new regulatory authorities’ willingness to listen to these entrepreneurs’ proposals for increased connectivity in underserved regions. This demonstrates the government’s openness to hearing these businesses’ ideas, signaling a potential shift in approach.
The Lifeline Program Comparison
The micro operators drew inspiration from the US Lifeline program, which significantly benefited TracFone, a mobile virtual network operator under America Movil. The program provided monthly subsidies of $9.20 to consumers, enabling them to choose a telephony and internet service provider. TracFone’s value proposition attracted millions of customers, making it one of the largest mobile virtual network operators globally before being acquired by Verizon.
Challenges and Proposed Solutions
The CFE, part of the Mexican government, has only recently started settling its debts. This development should improve the financial situation of both CFE and private companies in the value chain, allowing them to maintain contracted infrastructure. However, Altán Redes, a public-private company, currently utilizes much of this infrastructure for its cellular services.
The micro operators suggested “fiber-optic” towers with antennas for service providers (Wisp) to increase the profitability of their infrastructure. They also proposed that the government subsidize consumers, allowing them to select value-added mobile service providers. This approach mirrors the Lifeline program’s success in the US.
Local Taxation Issues
During the meeting, participants highlighted the ongoing issue of excessive local taxation by states and municipalities. For instance, Santiago Astata, Oaxaca, levies an annual fee of 150,000 pesos per tower, which is considered exorbitant for the market size. In contrast, tower owners in Mexico City charge monthly fees of 20,000 pesos.
Key Questions and Answers
- What is the main proposal by Mexican micro operators? They are requesting a government-funded subsidy program, similar to the US Lifeline initiative, to help low-income Mexicans choose mobile service providers.
- Who attended the meeting? Leaders from Amonvac, ATIM, Wisp Mx, and representatives from five tower companies participated.
- What inspired the micro operators’ proposal? They drew inspiration from the successful US Lifeline program, which significantly benefited TracFone.
- What challenges does the industry face? Excessive local taxation by states and municipalities, as well as CFE’s delayed debt settlement, pose challenges.
- What solutions did the micro operators propose? They suggested a government subsidy program for consumers and leveraging passive infrastructure, such as towers, for increased profitability.
