Fast Market Research recommends "Mexico Telecommunications Report Q1 2014" from Business Monitor International, now available

Boston, MA -- (SBWire) -- 01/06/2014 --Compared with its Latin American counterparts, Mexico's telecoms market is underdeveloped, with low penetration rates, high tariffs and a lack of competition as America Movil dominates the market through its Telmex and Telcel subsidiaries. New reforms signed into law in July are aimed at introducing a higher level of competition, although it is likely to be some time before the full effects of these reforms materialise. Nevertheless, operators remain optimistic about the changes, with Iusacell revealing plans to triple its market share over three years.

Key Data

- In Q213, Cofetel revealed there were 102.3mn mobile subscribers in the country, taking the penetration rate up to 91.9%.
- The fixed-line market recorded 20.1mn lines in service at the end of December 2012, year-on-year (y-o-y) growth of 2.1%.
- Cofetel revealed there were more than 45.107mn internet users in Mexico at the end of 2012. There was no new regulatory data for internet subscriptions - we believe there were 13.8mn internet subscriptions excluding 3G mobile subscriptions at the end of 2011.

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Risk/Reward Ratings

Mexico is in first place in the Q413 rankings, with a score of 62.4.
Key Trends & Developments

A new bill signed into law by President Enrique Pena Nieto in June 2013 has paved the way for the creation of a new autonomous regulatory authority, the Federal Telecommunications Institute (Ifetel), which was formally established in September 2013. Ifetel has been imbued with more powers than the previous regulator Cofetel, to classify as 'dominant' any operator with over 50% market share. In practice, it has been given 180 days to carry out this classification process, which means the repercussions of the telecoms reform will not be relevant until at least 2014. Ifetel's powers will allow it to impose punitive sanctions on any company that resists competition, which include asymmetric termination rates, fines and even asset sales. Whether or not the targeted companies will submit to Ifetel without costly legal disputes, remains to be seen, and we remain cautious until then. By mid-October 2013, Ifetel was reported to have made little progress in terms of the above.

Following on from its inauguration in September 2013, one of Ifetel's first tasks will be to implement of the must-carry and must-offer rules. A must-offer obligation would require free-to-air broadcasters to make their channels available free to competitors, while a must-carry commitment would require pay-TV operators to provide free-to-air TV channels on their platforms. Although Ifetel has attracted criticism in the local media for apparently dragging its heels, there are a number of secondary laws as part of the overall telecoms reform that will not be completed until December 2013.

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