Boston, MA -- (SBWIRE) -- 07/22/2013 -- 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. But steps are being taken by the government and operators to change this model. Operators are optimistic about the changes, with Iusacell revealing plans to triple its market share over three years. Also, with November's launch of LTE technology, we believe the technology will help encourage further investment in the telecoms sector and boost market growth.

Key Data

- In Q412, Cofetel revealed there were 10.611mn mobile subscribers in the country, making a penetration rate of 91.1%.
- The fixed-line market recorded 20.1mn lines in service at the end of December 2012, year-on-year (y-oy) 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 climbed one place in the Q313 rankings up to third, behind Brazil and Chile. It made gains to its overall figure, due to an improvement in the Industry Rewards score, despite a decline Country Risk.

Key Trends & Developments

Telecoms Reform

In March 2013, the government proposed legislation to limit the power of dominant operators in the telecoms industry. This would help to encourage much needed competition in the mobile, fixed-line and pay-TV sectors and contribute to growth over the long-term.

Axtel Launches IPTV

In January 2013, alternative fixed-line operator, Axtel has launched IPTV in three cities, with plans to expand further into Mexico. This will allow Axtel to offer triple-play bundled packages.

Iusacell Plans To Triple Subscribers

Iusacell revealed plans to triple its subscriber base by 2015 though investing US$800mn. Televisa's executive vice-president, Alfonso de Angoitia, told investors that the US$800mn needed for Iusacell's continued growth could be raised in a number of ways, including increasing debt or investment from Televisa and Grupo Salinas - which owns the remaining 50% - split equally between the companies.

Telcel Launches LTE

In November 2012, Huawei partnered with Mexico's Telcel to introduce the country's first commercial LTE network. Telcel initiated its LTE service in nine major metropolitan markets and plans to reach 26 cities within six months. The service is targeted at prepaid users, who encouragingly already generate a significant volume of non-voice service revenue for Telcel.

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