Mexico - Legislation to Increase Competition Encourages America Movil To Change, Reveals New Report

With a population of around 109 million and a fixed-line teledensity of around 17%, Mexico's telecom sector retains significant potential for growth. The market is dominated by the incumbent Telmex, with about 80% market share, while the mobile market is dominated by Telmex's sister company Telcel, both being owned by Amrica Mvil. To address this, a telecom reform law passed in mid-2013 set up a new regulator, removed barriers to foreign investment and has introduced measures to reduce America Mvil's market share. These reforms will go far to making Mexico's telecom market more competitive.

The broadband sector is one of the highest growth areas in Mexico's telecoms market. The main cable TV providers, Megacable, Cablems and Cablevisin, have begun to broaden their bundled services offerings, and as a result their broadband subscriber base has grown steadily in recent years. Nevertheless, there is significant scope for further market development given that the country's broadband penetration is among the second lowest among the 34 OECD countries, and consumer prices remain high.

Growth in the mobile market has begun to slow in response to higher penetration. Telcel dominates the market, accounting for about 70% of subscribers. Mobile data is rapidly emerging as a key driver, with LTE infrastructure expanding across the country. Operators are making use of concessions in the 700MHz band while the regulator has also assigned spectrum in the 2.5GHz band for LTE, which the government is in the process of reclaiming from existing holders.

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