Mexico begins opening up its telecommunications sector

When Mexicans switch on their television sets or use their cellphones, they usually watch Televisa – the biggest network in the country – or use Telcel as their provider. But that could soon change.

The Federal Telecommunications Institute (Ifetel) has officially mapped out the first steps to open up Mexico’s traditionally tightly controlled media sector.

On Thursday, Ifetel took out a notice in Mexico’s official DOF gazette announcing bids for licenses for at least two new national television networks. “For the first time in the history of the country there will be a bidding process to assign free-to-air television frequencies, which proposes to improve market competition,” the institute said in a statement.

Currently, Televisa – Mexico’s oldest broadcasting network – controls 70 percent of the market, while TV Azteca holds 30 percent of the local broadcast stations.

Ifetel also intends to break up the phone monopolies currently held by Grupo Televisa and Telcel’s parent company América Movil, which the institute called the country’s two “prevailing economic operators” and who corner more than 50-percent of the market.

Opening the telecommunications market to competition is part of the reform package introduced last year by President Enrique Peña Nieto, and which was approved in June by Congress with the support of the opposition conservative National Action Party (PAN) and leftist Revolutionary Democratic Party (PRD). However, the process to restructure Mexico’s closed-off sector has been a slow one. Lawmakers still need to approve a second-tier of bills to actually put the reform in place before December 9.

Ifetel will break up the phone monopolies held by Grupo Televisa and América Movil

Ifetel intends to inform the cellphone industry giants of its precise plans in the coming days once they are served with official notices, the statement said. As for the television networks, Ifetel will inform them by Sunday of its new rules and terms concerning the bidding for the available licenses.

Televisa, the biggest network in all of Latin America, also owns four of the top cable channels in Mexico. Grupo Televisa owner Emilio Azcárraga Jean was recently ranked 663 on Forbe’s list of the richest men in the world with an estimated fortune of $2.6 billion.

América Móvil, owned by billionaire Carlos Slim, is also major player in the region. In Mexico, its affiliate Telmex provides 84 percent of Mexico’s telephone and internet services.