Strong Growth in Mexican Mobile Market Is Expected Over Next Five Years If Regulatory Challenges Can Be Overcome, Enabling Operators to Boost Investments
Mobile broadband (3G/4G) connections in Mexico are forecast to reach 100 million within five years, driven by strong investments in networks and rising smartphone adoption. This new data was presented today by Sebastián Cabello, Head of GSMA for Latin America, at the start of the Latin American Telecommunications Congress 2015 (CLT 2015), which gathers the key players in the public, private and academic sectors to debate the public policy challenges faced by the digital ecosystem in the region.
According to new data from GSMA Intelligence, the research arm of the GSMA, 3G/4G mobile broadband connections in Mexico stood at almost 50 million at the end of the first quarter of 2015, and are forecast to double to 100 million by 2020.
The Mexican mobile market is the second-largest in Latin America after Brazil. There were 46 unique mobile subscribers in Mexico in Q1 2015, accounting for over 100 million connections. In terms of coverage, 4G networks covered 30 per cent of the Mexican population in Q1 2015, forecast to expand to cover 85 per cent of the population within five years.
Alongside expanding 3G/4G network coverage, migration to higher-speed mobile broadband is also being driven by growing smartphone adoption. Smartphones in Mexico today account for 24per cent of mobile connections – but it is calculated that smartphones will grow to account for 63 per cent of mobile connections by the end of 2020.
Cellular M2M connections surpassed 2 million in Mexico and 17 million in Latin America in Q1 2015, representing o2.4 per cent of total mobile connections. This figure is below the global average of 3.5 per cent, but a 20-25 per cent annual growth rate is expected in Latin America over the next five years, reaching 60 million cellular M2M connections in the region by 2020. According to Cabello, “the future growth of the mobile ecosystem will go hand-in-hand with the rise of the Internet of Things, a concept that is already improving quality of life for people, by providing innovative solutions in transportation, security, health services and public services”.
Mobile Contributions to Security Challenges
During the CLT 2015 plenary session, GSMA coordinated a panel concerning the security issues faced by Latin Americans and Mexicans in particular. Different tools offered by the industry today were highlighted to empower and protect users from mobile phone theft, child abuse, extortion and disaster response. The state of privacy, legal intervention of communications, geo-localisation and information inquiries from governments were also discussed.
This is especially important as the Federal Telecommunications Institute (IFT) is close to regulating the Security and Justice Collaboration Guidelines adopted with the Telecommunications Reform.
Cooperation between mobile operators and government is already in progress following the launch of the “We Care Mexico” campaign in February. With support from IFT, the GSMA Stolen Devices Verification System was implemented(1), a system which allows users to verify in real time whether a device has been reported as stolen. Since deployment of this service, more than 63,000 inquiries were made in less than two months, proving its usefulness in reducing the problem of theft.
Regulatory Challenges for Mobile Network Investment in Mexico
To achieve the positive growth forecasts in Mexico, public policies that foster investment and competition are required, paying attention to the following challenges:
- Spectrum allocation schedule: Harmonised and standardised spectrum availability at a regional level is vital to the mobile industry. As long as the country can offer future transparency in matters of the availability and allocation of future spectrum bands, industry players will be able to effectively plan the budgeting to invest and expand their service offers(2).
- Infrastructure deployment and specific taxes: It is essential to continue working together to reduce municipal barriers that obstruct antenna installation, seeking application of a uniform procedure nationwide that prevents arbitrary hold-ups to network deployment. Similarly, a removal of telecoms specific taxes, such as IEPS, which affects adoption in lower-income sectors, should be evaluated.
- A level playing field for competitive services: In many cases, internet services (OTT) compete directly with traditional voice and text services, but do not face national regulations and taxes. To ensure fair competition, we must erase regulatory asymmetries and apply the same rules to the same services, regardless of the technology in use or the providers’ geographic origin.
- Privacy-security balance: To achieve sustainable digital growth, special attention must be given to the threats to users’ privacy and security. There is a fine balance between the authorities’ need for call intervention, or the security authorities’ need to know the users’ geographic location and the users’ constitutional right to privacy. Among these are the right to protect individuals, their families and the confidentiality of their communications, documents and property.
“Intensive deployment of new 4G networks, and growing smartphone adoption are democratising internet access across all of Mexico and Latin America. Public-private dialogue must be open, seeking to stimulate investment, foster industry competition and protect mobile users”, said Cabello at the opening of CLT 2015.
The third edition of the Latin American Telecommunications Congress 2015 will be held from 13 to 16 July in Cancún, Mexico, organised by GSMA, CAF Latin America development bank, ASIET and Mexico’s Communications and Transport Secretary (SCT). This important telecommunications meeting in Latin America will gather first-level authorities, executives and delegates, representing government and regulatory agencies, lawmakers, telecom operators, device and service providers, consultants and academics.
 System available for all Mexican mobile users at IFT website.
 Mexico is the third Latin American country with the least spectrum assigned to mobile services, with just 210Mhz, while Brazil has assigned 634Mhz, Chile 450Mhz and Colombia 415Mhz.