Reshaping Mexico’s Telecom Industry with Connectivity for All

For years, Mexicans complained of their cell phones’ spotty service and high cost—but of even greater concern to most subscribers was networks’ limited reach. Many people had no access to wireless connectivity and were left behind as the banking, health, and education sectors began to expand online service offerings.

Possibilities for better wireless service started to improve after constitutional reform in 2014 that broke up monopolies and welcomed competition. These new telecom laws laid the foundation for Red Compartida, a groundbreaking wholesale wireless network that IFC has helped develop. Its 4G LTE technology can be easily upgraded to 5G, positioning the people of Mexico for next-generation access.

Unique to Mexico, Red Compartida will offer wireless connectivity to more than 90 percent of the nation’s population—over 110 million people. This new network will cover at least 30 percent of that total when the lines open in March 2018. Full wireless coverage, including remote areas of Mexico where cell coverage has never been possible, will be achieved in seven years.

IFC and the China-Mexico Fund, managed by IFC Asset Management Company, are shareholders of the company.

Red Compartida Answers the Call

Mexico’s constitutional reform established internet access as a right to all and laid the groundwork for a more level playing field for the telecom sector. Under the new laws, the Mexican telecommunications regulator was required to establish a wholesale-only wireless network—a “carrier’s carrier” that will sell mobile-network capacity to all comers.

The result was Red Compartida (“shared network”), announced in 2015. In late 2016, Mexico’s Ministry of Communications and Transportation announced that the ALTÁN Consortium won the international tender process for Red Compartida. The network will grow to provide services nationwide using all-IP network and 4G LTE technology on the 700-megahertz spectrum band. The network concession is for a term of 20 years with an option to extend for another 20 years.

Taking Technology to Remote Areas

Red Compartida will be deployed in seven regions, including those that are home to Guadalajara and Monterrey, Mexico’s second and third largest cities. In addition to improving service for current cell customers, it will make the technology accessible to people who have never had these types of services, including those in Mexico’s Pueblos Mágicos (or Magic Towns)—remote areas across the country that are culturally and historically significant. Some of those benefits include improved access to banking, health, and education services, boosting economic activities for those who would otherwise be unable to participate.

The new, affordable coverage and access to technology and apps are expected to generate entrepreneurship projects, new work techniques for users, and new ways to create and deliver trade. Red Compartida will be beneficial to communities as well, as it will be used to synchronize ATMs, surveillance services, and pedestrian lights. It will also help create smart cities through the control of traffic jams, civil protection alerts, sensors to measure and prevent water leaks, public and private transportation monitoring, and tracking of goods in highways.

The IFC Asset Management Company’s China-Mexico Fund, which was critical to the development of Red Compartida, makes equity, equity-related, and mezzanine investments in privately held companies in Mexico.

Read more about IFC’s work in the telecom sector at www.ifc.org/TMT. And to learn more about IFC Asset Management Company, visit: https://www.ifcamc.org/

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Published in January 2018.