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Mexico - Telecoms, Mobile, Broadband and Forecasts

For those seeking high level strategic information and objective analysis on this region, this report is essential reading and gives further information on:

  • Forecast growth in select telecommunication markets;
  • The emerging trends and convergence in the Mexican voice, broadband and digital TV sectors;
  • How Mexico is faring in terms of global broadband development;
  • The growth of wireless voice and data and the deployment of 3G and 4G technologies;
  • Key information on the major telecommunication operators;
  • Scenario forecasts for the fixed line, mobile, and broadband markets. 


BuddeComm’s annual publication, ‘Mexico - Telecoms, Mobile, Broadband and Forecasts’, profiles the fixed-line, mobile and broadband markets in Mexico. The publication also examines the convergence of these technologies with each other and with digital media such as digital TV and the emergence of new telecommunication services such as VoIP. 

Because of Mexico’s geographical position and its strong trading connection with the USA, the economic climate of the country follows that of the USA. Mexico’s principal import and export partner is the USA; hence, when the USA is in recession, Mexico tends to follow. The US economy contracted by approximately 3% in the Q3 2008, by more than 5% in Q4 2008 and by a further 6% in Q1 2009. As expected, the Mexican economy followed suit with negative growth of 1% for the fourth quarter of 2008 and negative growth for each of the first three quarters of 2009 at around 7%, 10% and 6% respectively. By the end of 2009 Mexico’s economy had contracted by 6.5%, its worst recession since 1932. 

In relation to the telecommunications industry specifically, industry growth has long outpaced broader economic growth. Annualised growth for the nine months to 30 September 2009 was a healthy 13% compared to a GDP contraction of 9%, yet this was around half the sector’s growth rate for the previous year. In fact, in 2009 the telecommunications industry grew at its slowest rate since 2002. The outlook for 2010/11 is for the industry to remain in double digit annual growth in the mid-teens and it is expected to take between 24 to 48 months before the sector returns to the robust twenty-something percentage points growth rates which it enjoyed in 2004/05 and 2007/08. 

The planned wireless spectrum auction in mid-2010 is expected to boost growth and competition in the mobile market and facilitate the launch of next generation mobile technology. The predominance of mobile phones over fixed lines, prevalent in all of Latin America, is expected to continue in Mexico. The satellite TV broadcasting sector will continue to enjoy robust growth in 2010/11 with recent entrant Dish Mexico enjoying rapid subscriber growth and regulatory approval for a third competitor to enter the market. Similarly, the cable TV companies will continue to drive the growth in VoIP and triple play services. 

This report contains overviews, analyses and detailed statistics of the Mexican fixed-line, mobile and broadband markets including developments in emerging technologies such as wireless broadband and VoIP and scenario forecasts for the fixed-line, mobile, and broadband markets. 

Market highlights:

During 2009 and early 2010 Mexico’s telecommunications industry maintained double figure annual growth despite the deep economic recession.

Mexico remains the last country in the OECD yet to unbundle its local loop. Thus despite liberalisation, Telmex still dominates the fixed-line market with around 90% of lines. Thus Mexico’s growth in fixed lines has been steadily declining for the past eight years, from 13% annual growth in 2000 to negligible growth in 2009. Accordingly, teledensity in early 2010 continued to languish at approximately 18%, around average for Latin America. Moreover, there are significant disparities in fixed-line penetration between urban and rural areas.

The mobile sector remains one of the main drivers of telecom industry growth. Driven by a booming GSM sector, Mexico’s mobile industry grew at approximately 17% per annum, achieving more than 80% penetration by early 2010.

By early 2010 Telmex’s sister company, América Móvil (Telcel), still accounted for around 72% of the mobile market. However, 2010 promises to bring a shift in the competitive landscape with 3G and WiMAX spectrum auctions offering the chance for new entry and the strengthening of competitors such as Telefonica’s Movistar. In addition, the proposed acquisition by the media giant Grupo Televisa of a stake in Nextel de México would, if it proceeds, add significant strength to the fourth placed competitor.

Broadband is the other principal driver of growth in Mexico’s telecommunications market. Both cable modem and ADSL continued to enjoy strong subscriber growth in 2009 at a combined average growth rate of around 35%. Telmex’s ADSL product, Prodigy Infinitum, posted very high growth rates for the year and is expected to continue to do so during 2010/11.

The main cable TV providers, Megacable, Cablemás and Cablevisión, were making strong gains by successfully incentivising the purchase of triple play bundles of cable TV, broadband and telephony. As a result their broadband subscriber base and in particular their VoIP subscriber numbers witnessed healthy growth during 2009 and into early 2010.

Despite the economic downturn, it is expected that during 2009 broadband growth will remain in double figures as there is still significant scope for additional growth given Mexico’s broadband penetration is still only around one-third of the OECD average.

During 2009 the DTH satellite TV market enjoyed some of its highest growth rates for the decade, following the entry in November 2008 of Dish Mexico. During 2010 sectoral growth is expected to remain strong, particularly if Axtel utilises its regulatory approval to become the third provider of satellite TV.

On the regulatory front, the CFC declarations of Telmex and Telcel as dominant players in the fixed line and mobile sector respectively, pave the way for more stringent regulation of those companies. However, regulatory gamesmanship continues to typify the sector. For instance, in early 2009 when Cofetel published new interconnection regulations (known as PTFII) requiring all operators to provide third party access, Telmex responded by cutting planned investments in 2009 by a third. Thus Cofetel still requires greater independence and regulatory power in order to be able to properly foster a more competitive market. Calls for increased competition in the sector continue to mount. This appeared more likely than ever when, in early 2010, the Calderon government reiterated its willingness to pass legislation to strengthen the power of regulations and regulators. Forecast mobile subscribers and penetration rate - lower growth scenario - 2011 - 2016

Year Subscribers (million) Penetration
2010 (BYE) 90 80%
2011 96 85%
2012 102 89%
2013 107 93%
2014 111 95%
2015 115 97%
2016 117 98%
(Source: BuddeComm, forecasts)
Notes: BYE is Base Year Estimate. 

Data in this report is the latest available at the time of preparation and may not be for the current year. 

1. Key Statistics
2. Telecommunications Market
2.1 Overview
2.1.1 Fixed-line sector
2.1.2 Mobile sector
2.1.3 Cable TV sector
2.1.4 Satellite DTH sector
2.2 Market analysis - 2009/10
3. Regulatory Environment
3.1 Overview
3.1.1 Privatisation
3.1.2 Deregulation
3.1.3 Foreign investment rules
3.1.4 Privacy protection
3.1.5 Antitrust laws
3.1.6 Consumer protection and spam
3.2 Regulatory authorities
3.2.1 Federal Telecommunications Commission (Cofetel)
3.2.2 Under Ministry for Communications and Transport (SCT)
3.2.3 Comisión Federal de Competencia, (CFC)
3.3 Interconnection
3.4 Settlement rates and resale
3.5 Calling-Party-Pays (CPP)
3.6 Convergence regulation
4. Fixed Network Market
4.1 Overview
4.1.1 Teledensity, market overview and regulatory developments
4.1.2 Local telephony
4.1.3 Long-distance telephony
4.2 Fixed network operators
4.2.1 Teléfonos de México (Telmex)
4.2.2 Axtel
4.2.3 Alestra
4.2.4 Maxcom
4.2.5 Marcatel
5. Telecommunications Infrastructure
5.1 National telecom networks
5.2 International infrastructure
5.2.1 Terrestrial networks
5.2.2 Submarine cable networks
5.2.3 Satellite networks
5.3 Infrastructure developments
5.3.1 Voice over Internet Protocol (VoIP)
5.3.2 Next Generation Networks (NGNs)
5.3.3 Wireless Local Loop (WLL)
6. Internet Market
6.1 Overview
6.2 Internet statistics
7. Broadband Market
7.1 Overview
7.2 Asymmetrical Digital Subscriber Line (ADSL)
7.2.1 Prodigy Infinitum (Telmex)
7.3 Cable broadband
7.3.1 Megacable
7.3.2 Cablemás
7.3.3 Cablevisión
7.4 Wireless broadband
7.4.1 WiFi
7.4.2 Proposed WiMAX auction
7.4.3 Early WiMAX developments
7.5 Internet via satellite
7.6 Utilities broadband
7.6.1 Utilities communications
7.6.2 Smart grid technology
7.7 Triple play and VoIP developments
8. Convergence
8.1 Overview of media convergence
8.2 Triple play regulation issues
8.3 Digital TV broadcasting
8.3.1 Overview
8.3.2 Cable TV (CATV)
8.3.3 Direct-to-Home (DTH) Satellite TV
8.3.4 Multichannel Multipoint Distribution Systems (MMDS)
8.3.5 Digital Terrestrial TV (DTTV)
9. Mobile Communications
9.1 Overview of Mexico’s mobile (cell phone) market
9.1.1 Mobile market statistics
9.2 Regulatory issues
9.2.1 Regulatory authorities
9.2.2 Competition regulation
9.2.3 Interconnection
9.2.4 Identity regulation
9.2.5 Spectrum auctions
9.2.6 Mobile Number Portability (MNP)
9.3 Mobile technologies
9.3.1 Overview
9.3.2 Third Generation (3G) mobile
9.4 Major mobile operators
9.4.1 Telcel
9.4.2 Movistar
9.4.3 Grupo Iusacell
9.4.4 Nextel de México
9.5 Mobile voice services
9.5.1 Minutes of Use (MOU)
9.5.2 Prepaid
9.5.3 Satellite mobile
9.6 Mobile data services
9.6.1 SMS Text Messaging
9.6.2 Multimedia Messaging Service (MMS)
9.6.3 Push-to-Talk (PTT)
9.7 Mobile content and applications
9.7.1 Location-based Services (LBS)
10. Forecasts
10.1 Fixed-line subscriber and penetration forecasts - 2011 - 2016
10.2 Broadband forecasts scenario - 2011 - 2016
10.3 Mobile market forecasts - 2011 - 2016
11. Glossary of Abbreviations
Table 1 - Country statistics Mexico - 2010
Table 2 - Telecom revenue and investment statistics - 2010
Table 3 - Telephone network statistics - 2010
Table 4 - Internet provider statistics - 2010
Table 5 - Internet user statistics - 2010
Table 6 - Broadband statistics - 2010
Table 7 - Mobile statistics - 2010
Table 8 - National telecommunications authorities
Table 9 - Fixed lines in service, annual change and teledensity - 2000 - 2010
Table 10 - Telmex lines in service and annual change - 2000 - 2009
Table 11 - Axtel lines in service and annual change - 2002 - 2009
Table 12 - Maxcom lines in service and annual change - 2001 - 2009
Table 13 - Internet users, annual change and penetration rate - 2000 - 2010
Table 14 - Internet subscribers by access technology - 2000 - 2010
Table 15 - Location of computer use - 2005 - 2009
Table 16 - Prodigy Infinitum ADSL subscriber lines and annual change - 2002 - 2009
Table 17 - Megacable cable modem subscribers and annual change - 2001 - 2009
Table 18 - Megacable Internet ARPU - 2007 - 2009
Table 19 - Cablemás cable modem subscribers and annual change - 2002 - 2009
Table 20 - Cablemás broadband ARPU and churn - 2006 - 2009
Table 21 - Cablevisión cable modem subscribers and annual change - 2002 - 2009
Table 22 - Cable VoIP subscribers of major providers - 2006 - 2009
Table 23 - Pay TV subscribers by technology, annual change and penetration rate - 1998 - 2010
Table 24 - Megacable pay TV subscribers and annual change - 2001 - 2009
Table 25 - Megacable video and telephone ARPU - 2007 - 2009
Table 26 - Cablemás CATV subscribers and annual change - 2002 - 2009
Table 27 - Cablemás CATV and VoIP ARPUs and churn rates - 2006 - 2009
Table 28 - Cablevisión pay TV subscribers and annual change - 2000 - 2009
Table 29 - Sky DTH subscribers and annual change - 2000 - 2009
Table 30 - Mobile operators, subscribers and annual change - 2009
Table 31 - Mobile subscribers, annual change and penetration rate - 2000 - 2011
Table 32 - Mobile market share by major operator - 2001 - 2009
Table 33 - Telcel subscribers and annual change - 1998 - 2009
Table 34 - Telcel churn, monthly minutes of use and ARPU - 2008 - 2009
Table 35 - Movistar subscribers and annual change - 2001 - 2009
Table 36 - Movistar churn, minutes of use and ARPU - 2006 - 2009
Table 37 - Iusacell subscribers and annual change - 1998 - 2009
Table 38 - Unefón subscribers and annual change - 2000 - 2007
Table 39 - Monthly and yearly minutes of use and annual change - 2000 - 2009
Table 40 - Prepaid / postpaid subscribers and annual change - 1997 - 2009
Table 41 - Forecast fixed-line subscribers and penetration rate - lower growth scenario - 2011 - 2016
Table 42 - Forecast fixed-line subscribers and penetration rates - higher growth scenario - 2011 - 2016
Table 43 - Forecast fixed broadband subscribers and penetration rate - lower growth scenario - 2011 - 2016
Table 44 - Forecast fixed broadband subscribers and penetration - higher growth scenario - 2011 - 2016
Table 45 - Forecast mobile subscribers and penetration - lower growth scenario - 2011 - 2016
Table 46 - Forecast mobile subscribers and penetration - higher growth scenario - 2011 - 2016
Exhibit 1 - Fixed-line local telephony licence holders
Exhibit 2 - Fixed-wireless local telephony licence holders
Exhibit 3 - Long-distance licence holders
Exhibit 4 - Telmex at a glance
Exhibit 5 - Major submarine cable networks landing in Mexico
Exhibit 6 - Triple play case study - Megacable
Exhibit 7 - Licences of mobile operators
Exhibit 8 - Telefónica acquisitions: Bajacel, Movitel, Norcel, Cedetel, and Pegaso

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