By Graeme Stewart
Implementing Telecommunication Reform is proving difficult for the watchdog body assigned the task of ensuring that the far-reaching changes are put in place. But the Commissioner of the organization feels assured that the changes will be well worth waiting for and that they will herald a new, bright future for Mexico’s broadcasting and telecoms in the years ahead.
Speaking to MEXICONOW after appearing in a panel at the CANIETI National Convention in Mexico City in October, Mario German Fromow, Commissioner of the Federal Institute of Telecommunications, said: “We are implementing the Constitutional Reforms. Some preponderance in telecommunications and broadcasting was defined last year and we have imposed an asymmetric regulation on those preponderant agents.
“The Institute identified Grupo Televisa, Latin America’s largest TV company, as the preponderant in the broadcasting sector and America Movil, the leading wireless services provider in Latin America and the third largest in the world in terms of equity subscribers, Imbursa and other companies of Carso Group, as the preponderant in the telecommunications sector.
The Federal Telecommunications Institute (IFT) is an independent government agency responsible for the regulation of telecommunications and broadcasting services. It was formed on September 10, 2013, as part of larger reforms to Mexican telecom regulations, and replaced theFederal Telecommunications Commission (Cofetel).
In 2013, President Enrique Peña Nieto created the IFT to replace Cofetel as part of the telecommunications reform package of thePacto por Mexico. The IFT is an autonomous federal agency that is responsible for the regulation of the use of spectrum, telecommunications and broadcasting networks and offerings, and access to infrastructure. IFT also regulates the awarding of concessions and permits for broadcast stations and promotes and protects competition in telecommunications.
Mr. Fromow continued: “Thanks to these Constitutional Reforms there are new competitors in both sectors, including AT&T in the telecoms sector.
“We are happy with the Reforms and we are working very hard to make sure that they are implemented, although I have to say that it is not too easy to implement this kind of Reform as the Mexican market in both sectors, broadcasting and telecommunication, is very concentrated as America Movil in the telecoms sector controls 70% of the sector and in broadcasting Grupo Televisa has a market share of about 85%. To promote competition in those sectors is no easy task but we are working on it.”
“We are confident about the future of both sectors in Mexico and we are sure that they will continue to grow. The international economic situation is not too good at the moment but we are confident that we are going to have new entrants in those fields, fresh competition in those sectors, and also we are going to work closely with Canada and the USA to liberate the 600mh spectrum Band in order to use this spectrum in the near future for mobile broadband telecommunications service.”
The importance of the role played by IFT in implementing the Constitutional Reform in Telecommunications was highlighted by the Americas Society/ Council of the Americas, who explained that Mexican President Enrique Peña Nieto signed a constitutional amendment that transformed the government’s role in telecommunications and expanded its power to curtail media monopolies. The amendment had, they said, “seismic potential for Mexico’s telecom industry and for its political future.”
The Latin America think-tank continued: “What makes the reform powerful is that much of the regulation is embedded in Article 6 of the Constitution, which establishes the right to free speech. Grounding this in the Constitution underlines the fact that the new telecom reform is as much about the audience as it is about the speaker. It reinforces the government’s role in making sure smaller voices are not drowned out by power, money or bias.
“But the reform’s success is not ensured. The government must first reign in powerful actors.”
“Mexico’s telecom sector is dominated by a few enormously powerful players. Carlos Slim, once recognized as the richest man in the world, received the lion’s share of the telephone market when Telmex, the government’s telephone monopoly, was transferred, cheaply and unaltered, into his hands in the early 1990s.”
“The television market is split between two mass media companies: Televisa, which controls 321 of the 566 commercial frequencies, and the newer TV Azteca—built with public funds and then also cheaply privatized to a single player (Ricardo Salinas) in the 1990s. TV Azteca has roughly 211 frequencies. Together, the two companies control 94 percent of commercial TV frequencies (62 percent of all frequencies) and almost all of the market.”
The consumer is the real winner in all of this, as the cost of telecommunications fell dramatically thanks to increased competition in the sector.
In August of 2015, America Movil removed roaming charges on calls to and data in the United States for 40 million Mexican prepay clients as it geared up to prevent new rival AT&T Inc. stealing market share on its home turf.
The company said calls made to the United States by prepaid customers on “Amigo Optimo” and “Optimo Plus” plans would now be charged local rates. The same would apply when using data in the United States.
Its remaining prepaid customers, around 12 million at the end of the second quarter, could also request the change, the company said.
Since the law was passed, AT&T has challenged America Movil by buying two Mexican wireless operators, prompting operators in both countries to start offering “borderless” call and data plans. AT&T recently offered unlimited number of calls and messages and one Giga of Internet to its U.S. customers while visiting Mexico at no additional charge.
America Movil said in July it would eliminate roaming charges from Mexico to the United States for those of its 10.5 million post-pay customers who opt to pay extra 50 pesos per month.
“We are pushing this asymmetric regulation very hard and soon, we will be concentrating on the AWS Band 1 and 3 on 80 MHz and we will have an auction, maybe early in 2016. After that we will have another auction in the 2.5GH Band, maybe in the middle of 2016, and also a TV channel auction at the same time. At least 123 channels will appear in that auction. It could be a national coverage or local coverage.”