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Recently Released Market Study: Mexico Telecommunications Report Q4 2013

Recently published research from Business Monitor International, "Mexico Telecommunications Report Q4 2013", is now available at Fast Market Research


Boston, MA -- (SBWIRE) -- 10/21/2013 -- 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 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 Q113, Cofetel revealed there were 101.6mn mobile subscribers in the country, taking the penetration rate up to 91.3%.
- 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 nternet 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 second place in the Q413 rankings behind Chile, with a score of 61.9.

Key Trends & Developments

In June 2013, President Enrique Pena Nieto signed into law a bill which targets phone, internet and TV providers with a market share of over 50%. The new law authorises the creation of a new autonomous regulator, the Federal Telecommunications Institute (Ifetel), which is due to take over from Cofetel in September 2013. Ifetel's powers will allow it to impose punitive sanctions on any company that resists competition, with these sanctions including asymmetric termination rates, fines and even asset sales.

In July 2013, Cofeco upheld a fine of US$50mn for uncompetitive practices that had been imposed on the America Movil subsidiaries, Telmex and Telnor. This followed the antitrust commission's overruling of an appeal by Telcel in April over a previous finding that it was dominant in Mexico's mobile-telephony market. Nevertheless, America Movil has welcomed President Pena Nieto's signing of the new competition law, in particular the plans to remove the 49% cap on foreign investment for satellite providers. Moreover, the company has pledged to continue investing heavily.

America Movil has forecast that, by 2017, Mexico will have almost 6mn subscribers to VoD (video on demand), with this sector growing by an average of 50% per annum over the next four years. Mexico currently accounts for 22% of Latin America's VoD market, with the country's 1mn or so subscribers superseded only by Brazil (2.5 million subscribers).

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.

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