2009 Mexico - Telecoms, Mobile, Broadband and Forecasts

Publication Overview

For those seeking high level strategic information and objective analysis on this region, this report is essential reading and gives further information on:

·         Forecast growth in select telecommunication markets;

·         The emerging trends and convergence in the Mexican voice, broadband and digital TV sectors;

·         How Mexico is faring in terms of global broadband development;

·         The growth of wireless voice and data and the deployment of 3G and 4G technologies;

·         Key information on the major telecommunication operators;

·         Scenario forecasts for the fixed line, mobile, and broadband markets.

 

Researcher:- Lawrence Baker

Current publication date:- April 2009 (8th Edition)

Next publication date:- March 2010

Executive Summary

BuddeComm’s annual publication, ‘Mexico - Telecoms, Mobile, Broadband and Forecasts,’ profiles the fixed-line, mobile and broadband markets in Mexico. It also examines the convergence of these technologies with each other and with digital media such as digital TV and the emergence of new telecommunication services such as VoIP.

 

Because of Mexico’s geographical position and its strong trading connection with the USA, the economic climate of the country follows that of the USA. Mexico’s principal import and export partner is the USA; hence, when the USA is in recession, Mexico tends to follow. Indeed, the US economy contracted by approximately 0.5% in the third quarter 2008 and a further 1.5% in the fourth quarter, with Mexico following suit at negative growth of 1% for the fourth quarter 2008.

 

In relation to the telecoms industry specifically, industry growth has long outpaced the broader economic growth. Although growth for 2008 was a healthy 27% (compared with economy-wide growth of 1.3%), the effect of the economic downturn was becoming evident as the year progressed. Industry growth dropped from a record high of 36% in the second quarter 2008, down to 24% in the third quarter and to 14% for the fourth quarter. This trend is expected to continue through 2009 before increasing again in 2010.

 

The implementation of mobile number portability in mid-2008 together with the planned wireless spectrum auctions in 2009 are expected to boost competition in the mobile market and facilitate the launch of next generation mobile technology. The predominance of mobile phones over fixed lines, prevalent in all of Latin America, is expected to continue in Mexico.

 

This report provides overviews, analyses and detailed statistics of the Mexican fixed-line, mobile and broadband markets including developments in emerging technologies such as wireless broadband and VoIP and scenario forecasts for the fixed-line, mobile, and broadband markets.

 

Key highlights:

·         During 2008 and early 2009 Mexico’s telecom industry remained in double figure revenue growth despite the broader economy entering a period of recession. With a population of around 110 million and fixed-line teledensity of less than 20%, Mexico’s telecom sector retains significant potential for growth over the next 5-10 years.

·         Mexico’s growth in fixed-lines has been steadily declining for the past eight years, from 13% in 2000 to 4% in 2008. Thus teledensity in early 2009 continued to languish at approximately 19%, around average for Latin America. In addition, there are significant disparities in fixed-line penetration between urban and rural areas. Despite liberalisation, Telmex still dominates the fixed market with around 90% of lines. Mexico remains the last country in the OECD yet to unbundle its local loop.

·         Driven by a booming GSM sector, Mexico’s mobile industry is growing at a rate of approximately 15% per annum, achieving more than 70% penetration by early 2009.

·         By early 2009 Telmex’s sister company, América Móvil (Telcel), still accounted for around 72% of the mobile market.

·         Broadband is one of the highest growth sectors in Mexico’s telecom market, the revenue of which remained in double digit growth for the fourth quarter 2008 despite the broader economy posting negative growth for that period. For instance, Telmex’s ADSL product, Prodigy Infinitum, continued to post very strong growth rates for the year and is expected to continue to do so during 2009.

·         The main cable TV providers, Megacable, Cablemás and Cablevisión, have begun to incentivise the purchase of triple play bundles of cable TV, broadband and telephony, and as a result their broadband subscriber base, and in particular their VoIP subscriber numbers, witnessed healthy growth during 2008 and into early 2009.

·         Despite the economic downturn, it is expected that during 2009 broadband growth will remain in double figures as there is still significant scope for additional growth given Mexico’s broadband penetration is merely around one-quarter of the OECD average.

·         During 2009 the DTH satellite market will begin to enjoy some long overdue competition in the sector, following the entry in November 2008 of Dish Mexico.

·         Cofetel still requires greater independence and regulatory power in order to be able to properly foster a more competitive market. Calls for increased competition in the sector continue to mount. Thus, the competition agency, the CFC, announced separate investigations into the fixed, mobile and broadband sectors. Regulatory gamesmanship continues to typify the sector; for instance, in early 2009 when Cofetel published new interconnection regulations (known as PTFII) requiring all operators to provide third party access, Telmex responded by cutting planned investments in 2009 by a third.

 

Forecast mobile subscribers – lower growth scenario – 2010; 2015

Year

Subscribers (million)

Penetration (subscribers/population)

2010

93

82%

2015

107

89%

(Source: BuddeComm forecasts)

 

Data in this report is the latest available at the time of preparation and may not be for the current year.

 

The following notes provide some background to our scenario forecasting methodology:

·         This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.

·         The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.

·         All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.

Table of Contents

  • 1. Key Statistics
  • 2. Telecommunications Market
    • 2.1 Overview
      • 2.1.1 Fixed-line sector
      • 2.1.2 Mobile sector
      • 2.1.3 Cable TV sector
      • 2.1.4 Satellite DTH sector
    • 2.2 Market analysis – 2008 - 2009
  • 3. Regulatory Environment
    • 3.1 Overview
      • 3.1.1 Privatisation
      • 3.1.2 Deregulation
      • 3.1.3 Foreign investment restriction
      • 3.1.4 Privacy protection
      • 3.1.5 Antitrust laws
      • 3.1.6 Consumer protection and spam
    • 3.2 Regulatory authorities
      • 3.2.1 Federal Telecommunications Commission (Cofetel)
      • 3.2.2 Under Ministry for Communications and Transport (SCT)
      • 3.2.3 Comisión Federal de Competencia, (CFC)
    • 3.3 Interconnection
    • 3.4 Settlement rates and resale
    • 3.5 Calling-Party-Pays (CPP)
    • 3.6 Convergence regulation
  • 4. Fixed Network Operators in Mexico
    • 4.1 Overview of operators
      • 4.1.1 Local telephony
      • 4.1.2 Long-distance domestic and international telephony
    • 4.2 Teléfonos de México (Telmex)
    • 4.3 Alestra
    • 4.4 Axtel
      • 4.4.1 Avantel
    • 4.5 Maxcom
    • 4.6 Marcatel
  • 5. Telecommunications Infrastructure
    • 5.1 National telecom networks
    • 5.2 International infrastructure
      • 5.2.1 Terrestrial networks
      • 5.2.2 Submarine cable networks
      • 5.2.3 Satellite networks
    • 5.3 Infrastructure developments
      • 5.3.1 Voice over Internet Protocol (VoIP)
      • 5.3.2 Next Generation Networks (NGNs)
      • 5.3.3 Wireless Local Loop (WLL)
  • 6. Internet Market
    • 6.1 Overview
      • 6.1.1 Internet statistics
    • 6.2 ISP market
  • 7. Broadband Market
    • 7.1 Overview
    • 7.2 ADSL
      • 7.2.1 Prodigy Infinitum (Telmex)
    • 7.3 Cable modems
    • 7.4 Wireless broadband
      • 7.4.1 WiFi
      • 7.4.2 WiMAX
      • 7.4.3 Internet via satellite
    • 7.5 Broadband over powerline (BPL)
  • 8. Convergence
    • 8.1 Overview of media convergence
    • 8.2 Triple play regulation issues
    • 8.3 Triple play and VoIP developments
    • 8.4 Digital TV
      • 8.4.1 Cable TV (CATV)
      • 8.4.2 Multichannel Multipoint Distribution Systems (MMDS)
      • 8.4.3 DTH satellite TV
      • 8.4.4 Interactive TV
      • 8.4.5 Digital Terrestrial TV (DTTV)
  • 9. Mobile Communications
    • 9.1 Overview of Mexico’s mobile (cell phone) market
      • 9.1.1 Mobile (cellular) statistics
    • 9.2 Regulatory issues
      • 9.2.1 Spectrum auctions
      • 9.2.2 Mobile Number Portability (MNP)
    • 9.3 Mobile technologies
      • 9.3.1 Third Generation (3G) mobile
    • 9.4 Major mobile operators
      • 9.4.1 Telcel
      • 9.4.2 Movistar
      • 9.4.3 Grupo Iusacell
      • 9.4.4 Unefón
      • 9.4.5 Nextel de México
    • 9.5 Mobile voice services
      • 9.5.1 Minutes of Use (MOU)
      • 9.5.2 Prepaid
      • 9.5.3 Satellite mobile
    • 9.6 Mobile data services
      • 9.6.1 Short Message Service (SMS)
      • 9.6.2 Multimedia Messaging Service (MMS)
      • 9.6.3 General Packet Radio Service (GPRS)
      • 9.6.4 Enhanced Data for GSM Evolution (EDGE)
      • 9.6.5 Push-to-Talk (PTT)
      • 9.6.6 High capacity mobile voice/data services (CDMA2000 1xRTT)
      • 9.6.7 Broadband wireless data service (1x EV-DO)
    • 9.7 Mobile content and applications
      • 9.7.1 Location-Based Services (LBS)
  • 10. Forecasts
    • 10.1 Overview
    • 10.2 Forecasts – fixed-line market to 2015
    • 10.3 Forecasts – broadband market to 2015
    • 10.4 Forecasts – mobile market to 2015
  • 11. Glossary of Abbreviations
  • Table 1 – Country statistics Mexico – 2008
  • Table 2 – Telecom revenue and investment statistics – 2008
  • Table 3 – Telephone network statistics – 2008
  • Table 4 – Internet provider statistics – 2008
  • Table 5 – Internet user statistics – 2009
  • Table 6 – Broadband statistics – 2008
  • Table 7 – Mobile statistics – 2008
  • Table 8 – National telecommunications authorities
  • Table 9 – Fixed lines in service, annual change and teledensity – 1996 - 2008
  • Table 10 – Telmex lines in service and annual change - 1997 - 2008
  • Table 11 – Alestra lines in service by sector and annual change - 1999 - 2007
  • Table 12 – Axtel lines in service and annual change - 2002 - 2007
  • Table 13 – Maxcom lines in service and annual change - 2001 - 2008
  • Table 14 – Internet users, annual change and penetration rate - 2000 - 2009
  • Table 15 – Internet subscribers by access technology - 2000 - 2008
  • Table 16 – Location based computer use - 2005 - 2009
  • Table 17 – Prodigy Infinitum ADSL subscriber lines and annual change - 2002 - 2008
  • Table 18 – Megacable cable modem subscribers and annual change - 2001 - 2008
  • Table 19 – Cablemás cable modem subscribers and annual change - 2002 - 2008
  • Table 20 – Cablevisión cable modem subscribers and annual change - 2002 - 2008
  • Table 21 – Cable VoIP subscribers per major provider - 2006 - 2008
  • Table 22 – Pay TV subscribers by technology, annual change & penetration – 1998 - 2008
  • Table 23 – Megacable pay TV subscribers and annual change - 2001 - 2008
  • Table 24 – Megacable ARPU by service - 2007 - 2008
  • Table 25 – Cablemás CATV subscribers and annual change - 2002 - 2008
  • Table 26 – Cablemás CATV, broadband and VoIP ARPUs and churn - 2006 - 2008
  • Table 27 – Cablevisión pay TV subscribers and annual change - 2000 - 2008
  • Table 28 – Sky DTH subscribers and annual change - 1999 - 2008
  • Table 29 – Mobile operators, subscribers and annual change – September 2008
  • Table 30 – Mobile subscribers, annual change and penetration rate – 1996 - 2008
  • Table 31 – Mobile market share by major operator – 2001 - 2008
  • Table 32 – Mobile penetration by region - 2002 - 2006
  • Table 33 – Telcel subscribers and annual change – 1998 - 2008
  • Table 34 – Telcel churn, monthly minutes of use and ARPU – 2007 - 2008
  • Table 35 – Movistar subscribers and annual change – 2001 - 2008
  • Table 36 – Movistar churn, minutes of use and ARPU – 2006 - 2008
  • Table 37 – Iusacell subscribers and annual change – 1998 - 2008
  • Table 38 – Unefón subscribers and annual change – 2000 - 2007
  • Table 39 – Nextel Mexico churn and monthly ARPU – 2007 - 2008
  • Table 40 – Monthly and yearly minutes of use and annual change – 2000 - 2007
  • Table 41 – Prepaid/postpaid subscribers and annual change – 1997 - 2008
  • Table 42 – Forecast fixed line subscribers – lower growth scenario – 2010; 2015
  • Table 43 – Forecast fixed line subscribers – higher growth scenario – 2010; 2015
  • Table 44 – Forecast broadband subscribers – lower growth scenario – 2010; 2015
  • Table 45 – Forecast broadband subscribers – higher growth scenario – 2010; 2015
  • Table 46 – Forecast mobile subscribers – lower growth scenario – 2010; 2015
  • Table 47 – Forecast mobile subscribers – upper growth scenario – 2010; 2015
  • Exhibit 1 – Fixed-line local telephony licence holders
  • Exhibit 2 – Fixed-wireless local telephony licence holders
  • Exhibit 3 – Long-distance licence holders
  • Exhibit 4 – Telmex at a glance
  • Exhibit 5 – Major submarine cable networks landing in Mexico
  • Exhibit 6 – Triple play case study – Megacable
  • Exhibit 7 – Mobile telephone regions in Mexico
  • Exhibit 8 – Licences of mobile operators
  • Exhibit 9 – Telefónica acquisitions: Bajacel, Movitel, Norcel, Cedetel, and Pegaso

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Annual Publication Profile

Technologies

Broadband Fixed
Broadcasting
Digital Media
Mobile & Wireless Broadband and Media
Mobile Communications (voice and infrastructure)
Regulations & Government Policies
Telecoms Infrastructure

Number of pages 95

Status Archived

Last updated 15 Apr 2009
Update History

Analyst: Lawrence Baker

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