Introduction
For decades, Mexico has strived to become a developed nation with third-world regulatory practices. The telecommunications reform of 2013 was a significant step towards modernity, attempting to open competition, lower prices, and break monopolies. However, under the administrations of what is known as the Fourth Transformation, the sector has reverted to moving backward.
The Telecom Giants’ Departure
Telefónica announced its definitive exit from Mexico after years of marginal profitability, rising costs, and an inability to consolidate its network model. Operating through 2019 on leased infrastructure from AT&T, this move signaled a quiet retreat. The company leaves with more questions than answers: how could a market of over 120 million consumers fail to sustain such a significant player?
AT&T, on the other hand, seeks a buyer for its Mexican operation, which has cost over $8 billion in acquisitions and deployment since 2015. Despite driving down prices and improving service quality, the company failed to achieve the necessary scale to compete against America Móvil’s persistent dominance. Today, AT&T aims to sell its Mexican unit for around $2 billion, a clear indication that the market has become too narrow for global operators.
Altán Redes: A Case of Structural Failure
Another episode contributing to the structural failure is Altán Redes. La Red Compartida was launched in 2017 as a public-private model to democratize connectivity and serve as a neutral wholesale platform. The project promised social coverage without distorting the market. However, it underestimated costs, overestimated demand, accrued debts exceeding 17 billion pesos, and ended up insolvent. In 2022, the government absorbed the company, effectively making it a de facto state-owned enterprise. The tool designed to balance the market instead reinforced government dependency and eroded private investment confidence.
Current Scenario
Today, Mexico faces a paradoxical situation. On one hand, nearshoring demands modern telecommunications infrastructure: 5G, fiber optics, data centers, and neutral networks to accompany industrial relocation. On the other hand, competition dwindles, investment incentives weaken, and the state repositions itself as an operator, regulator, and arbiter simultaneously.
The recent economic competition and telecommunications reform, centralizing supervision and expanding discretionary powers in a superagency with two subordinate regulators, could deepen this dilemma if not applied rigorously.
The appointment—and Senate ratification—of Commissioners for the Telecommunications Regulatory Commission demonstrated that loyalty and subordination outweigh competence and autonomy.
Key Questions and Answers
- Q: What does the departure of Telefónica, AT&T’s potential sale, and Altán Redes’ rescue signify? A: These are not isolated incidents but symptoms of a market that never fully opened and now risks closing even further.
- Q: Is the departure of international operators an insignificant event? A: No, it’s a warning sign. If we continue to weaken regulatory autonomy and hinder investment, Mexico will not only lose competition but also its digital future. A country without modern infrastructure cannot compete, innovate, or grow.
Conclusion
Mexico’s telecommunications sector is at a critical juncture. The recent developments highlight the need for robust regulatory autonomy, investment fostering, and a balanced market approach. Failure to address these issues may result in further contraction of the sector, hindering Mexico’s progress towards a modern, competitive digital landscape.
