Red Compartida

Logo of Red Compartida

Red Compartida (Shared Network) is the official name of the network that will result from the Mexican Government’s 2014-2016 effort to overhaul its telecommunications industry by introducing competition into the marketplace. If successful, the Red Compartida network will be the first fully wholesale mobile network deployed anywhere in the world.

The awarding body is the Mexican ministry of transport and communications, La Secretaría de Comunicaciones y Transportes (SCT)

Background

America Movil, the company owned by Carlos Slim, the world’s richest man.,[1] has long held a monopoly in the telecommunications marketplace in Mexico. In July 2014, it was reported in Forbes Magazine that Slim controlled 80% of Mexico’s landline market and 70% of the wireless market.[2] According to the Los Angeles Times, Mexican consumers have long been complaining at the “high costs and spotty service” provided by Slim’s companies.[3] Over the years, Slim has been accused of engaging in anti-competitive practices – for example, using his control over the telecommunications infrastructure to charge prohibitive connection fees to competitors.[4]

On July 9, 2014, the Mexican Government passed wide-ranging telecommunications reforms, designed to abolish long-distance phone charges, make it easier for customers to switch phone companies, and broaden access to free-to-air television stations.[5] In response, Slim announced that he would reduce his market share substantially, and announced plans to sell off America Movil assets worth up to 7 billion dollars[6]

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.[7] In 2015, the regulator announced the “Red Compartida” initiative.

Wholesale network

The Red Compartida network will be “wholesale only”. This means that the company which builds and operates the network will not be involved in providing mobile service to consumers. Instead, the operator will provide access to the network to mobile operators, who will in turn use the network capacity to provide a consumer mobile product. Access to the network for these operators will be sold to the highest bidder in regular auctions.

The advantage of a wholesale only network is that many new entrants can enter the Mexican consumer market at once. The cost of building a mobile network is prohibitive and requires billions of dollars in capital outlay. By providing the infrastructure through a wholesale only network, the cost of offering a new consumer service to Mexican customers will be significantly reduced.

The Mexican Government expects the construction of the wholesale network, and the resultant entry of new providers to the Mexican market to generate 13 billion dollars of Foreign Direct Investment over a three year period[8]

International Reaction

The Red Compartida project received international recognition at the Mobile World Congress in Barcelona, Spain, in 2016. An award was given to Mexico for its efforts in the area of “Governmental Leadership.” According to Monica Aspe, Mexico’s sub-secretary for telecommunications and transport, receipt of recognition in this area was a landmark telecommunications development in her country. She explained that, in the past, “European countries and China were almost solely the recipients of this award.”[9]

On the other hand, the giant US provider AT&T, which has in recent years invested 4.4 billion dollars in Mexico, was reported to be “particularly discomfited” with the project, especially since as an existing operator, they would be barred from taking part.[10]

Antitrust requirements

The Mexican Government requires that any bidder planning to construct the Red Compartida Network demonstrate that they have no ties whatever to any mobile service provider already operating in Mexico.

Timetable

An announcement awarding the project to the successful bidder was expected in October 2016. On 18 November, Altran consortium was awarded the project.

Potential bidders

Irish-American Firm Rivada Networks has announced that it will bid to build the Red Compartida network.[11] Several other companies are believed to be considering bids.

References

  1. ↑ "Carlos Slim Helu & family". Forbes. Retrieved 2016-10-04.
  2. ↑ Estevez, Dolia. "In A Surprising Move, Mexican Billionaire Carlos Slim To Sell Telecom Assets In Compliance With New Anti-Trust Rules". July 9, 2014. Forbes. Retrieved 2016-08-22.
  3. ↑ Wilkinson, Tracy (July 9, 2014). "Mexico telecom overhaul passes, billionaire Carlos Slim loses -- maybe". latimes.com. LA Times. Retrieved 2016-08-22.
  4. ↑ Emspak, Jesse (October 31, 2014). "How Carlos Slim Built His Fortune". Investopedia. Retrieved 2016-08-22.
  5. ↑ "Slimming down". The Economist. July 12, 2014. ISSN 0013-0613. Retrieved 2016-08-22.
  6. ↑ "America Movil aims to sell assets as quickly as possible". Reuters. July 9, 2014. Retrieved 2016-10-03.
  7. ↑ Velasco, Armando (June 23, 1015). "From oligopoly to competition: the story of Mexico's telecom reform - CapX". CAPX. Retrieved 2016-08-22.
  8. ↑ Ochoa, Manuel (March 2, 2016). "Mexican telecommunications infrastructure anticipated benefiting from significant flows of FDI". TECMA. Retrieved 2016-08-22.
  9. ↑ Ochoa, Manuel (March 2, 2016). "Mexican telecommunications infrastructure anticipated benefiting from significant flows of FDI - TECMA". Retrieved 2016-08-22.
  10. ↑ & Peter Cramton, Linda Doyle (October 9, 2015). "Mexico's wireless giants don't want to share - CapX". CAPX. Retrieved 2016-08-22.
  11. ↑ González, Luis Miguel (February 7, 2016). ""Estamos listos para hacer una apuesta fuerte por México"". El Economista. Retrieved 2016-08-22.

External links

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