Telecommunications in Mexico: State of the Marketplace

摘要

By 1999, all of Mexico's telecommunications sectors were opened to competition and its state-owned monopoly provider, Telmex, was privatized. It looked like the years of monopoly and duopoly were over. Furthermore, it looked like the huge disparity between rural and urban areas would finally be lessened with the increase in the number of fixed lines. However, although some progress has been made, Mexico still suffers from the worst fixed-line penetration in Latin America, and its telecommunications market is still largely in the hands of Telmex. As a result, Mexico's regulatory agency, COFETEL, has been the center of much criticism for being ineffective in regulating the industry and encouraging more competition. As Mexico's government now faces a new Telecommunications Law, which will further push for rural development and unbundling of Teimex's hold on the last mile, many are questioning whether COFETEL will have enough autonomy to enforce the law, if it passes. Telmex has been successful in fighting COFETEL up to this point, and it has been reluctant to cooperate with efforts to increase competition. Nevertheless, there are some positives. Mexico's industry is very attractive to foreign investors, who want to see the telecom infrastructure improved. The US, Mexico's largest trade partner for telecom equipment, has been aggressive about pushing for reform in foreign ownership limitations, which would allow US companies to come in and compete with Telmex. Because the government has been ineffective in improving this area, the US has pleaded with the World Trade Organization to get involved and force Mexico's hand. If the WTO is successful, significant development is expected.