Javier Lozano Alarcon Issue: Latin America I 1998
Article no.: 6
Topic: Mexico’s Communications Work Plan for 1998
Author: Javier Lozano Alarcon
Title: Minister
Organisation: Communications and Transport, Mexico
PDF size: 20KB

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Article abstract

After recognising the benefits provided by private investment and competition, Mexico has seen major ‘transformations in its communications sector, particularly in the regulatory transformation which has changed the role of the government to create a healthy and competent environment with transparent licensing procedures and legal certainty for investors. Here, Minister Lozano identifies 1998 as a key year for Mexico, and shares with us the country’s activities, prospects and opportunities.

 

Full Article

Mexico’s communication sector is facing one of the most important transformation processes ever seen. For decades, the sector was raised within a government-owned monopoly, but after recognising international trends of global markets and the benefits provided by private investment and competition, a major regulatory transformation process has changed the role of the government in the telecommunications industry. With this new regulatory framework, the role of the government is to promote the efficient development of telecommunications, through private investment, in a healthy competence environment, with transparent licensing procedures and legal certainty for investors. Since the Federal Telecommunications Law was enacted in 1995, additional regulatory provisions have been formulated to complete the new regulatory framework. With the use of these new tools, the Mexican government is promoting a vigorous growth in telecommunications infrastructure and services. Within the last three years, Mexico has opened its long distance market to competition, granting licenses to 11 companies which are struggling for customers against Telefonos de Mexico (TELMEX), the formerly State-owned telephone company until 1990. In addition, the government has auctioned radio spectrum for telecommunications services, including paging; point-to-point microwave links; fixed and mobile wireless access; multi-path, multi-channel distribution service (MMDS), and aeronautic mobile radio communication. On the other hand, there is an increased number of cable networks using all kinds of technologies to provide local telephony, data transmission, cable television and digital music services. Satellite services have also gained a rapid footing in the Mexican market. As a result of the satellite reciprocity agreement signed between the governments of Mexico and the United States, Mexico granted a license to provide Direct-to-Home (DTH) services in its territory, with the use of a foreign satellite. The Mexican government has granted a total of four licenses to provide DTH services, two of which are in operation, with more than 180,000 subscribers. Due to the constitutional amendments of 1995, the private sector can now participate in the Mexican satellite industry. Thus, by the end of 1997, Mexico privatised 75% of its satellite system (mobile services in the “L” band will remain under government ownership and control), and the remaining 25% will be sold in the stock market. Within this context, 1998 will be a key year for the Mexican communication sector to prop up its structural transformation and consolidate this major transition process. It will continue developing the regulatory framework; increasing telecommunications infrastructure and services, both in quantity and coverage, and giving strong support to public services controlled by the government, including mail, telegraph and rural telephony. The main tasks that the Mexican government plans to realise, regarding the communication sector during this year, are set forth in its 1998 Work plan, which includes the areas of telephony, satellite communication; radio communication; radio and television; information networks and information superhighways; mail, and telegraph. The Communications and Transportation Secretariat is working on the Regulation for the Subscription-Based Television Service and the Mobile Satellite Service Protocol. Administrative simplification procedures and the expedition of official standards will continue, in order to help concessionaires and permissionaires accomplish their objectives and facilitate regulation and verification of telecommunications services. The sector pretends to achieve higher quality standards and diversity of services, at accessible prices, for more users of the basic telephone service. Opening to competence long distance services will be consolidated through the corresponding complementary regulation, while spectrum auctions for wireless communication systems will continue, and terms for network interoperability and interconnection will be determined. Rural telephony programs will connect 5,438 towns and villages with populations of between 100 and 500, through budget resources and the application of incentives for cellular telephone concessionaires. As for satellite communication, international protocols with the US and Argentina will be formalised, in order to offer these services, with reciprocity, in each other’s territory. In addition, concessions for personal mobile communication via satellite with worldwide coverage will be granted this year. The State will co-ordinate programs to ensure the adequate maintenance and expansion of the distance-education network, Edusat, and to reinforce actions towards the best use of the satellite capacity reserved for social services and national security networks. Spectrum auctions for paging, trunking, subscription-based television and private radio communication services will continue. Likewise, through the adaptation of the regulatory framework for the radio communication industry, the sector intends to introduce a full competitive environment facing the development of new technologies. Regarding radio and television, the regulatory reform is oriented to cover the whole nation with these services under the following principles: a) transparent conditions for concession granting, which contribute to local development; b) the defence of Spanish language; c) commerce promotion; d) expansion of information and entertainment, and e) adoption of new technologies. The regulation for subscription-based audio and video services will promote, among others: national content productions; national values and culture diffusion; national cinematography; and youngster cared programs. The impulse to information networks and superhighways will provide the installation of value added services, with the purpose of offering informative and communication services through existing networks and new telecommunications infrastructure. National contents and educational productions shall be encouraged in order to become widespread via Internet and similar applications. With respect to the mail services, a law initiative, which defines the strategic exclusivity scope of the State in the postal operation, will be enacted. This is so that Servicio Postal Mexicano (SEPOMEX), the Mexican postal service, has a major presence throughout the country and operates in terms of opportunity, reliability, security and quality. Likewise, urban and commercial postal services will be regulated in view of building a competitive environment of the segment that encourages trade. The telegraphic service will direct its actions towards the modernisation of its equipment and networks, allowing diversification of services, paying special attention to a totally renewed electronic funds transfer system, that can operate with security and ease of access. Throughout this process, the government will keep a close relation with industry associations, representatives, legislators and academic institutions, to define priorities, support the complementary regulatory framework and solve issues that, for their importance, hold the sector’s progress. In addition, both the Communications and Transportation Secretariat and the Federal Telecommunications Commission will strengthen the supervision, inspection and sanction activities to insure the fulfillment of the concessionaires and permissionaires bindings. Radio monitoring and verification actions will increase to spot illegal and fraudulent practices. Conclusion Even when an important advance in the telecommunications sector has been taking place, it is still necessary to consolidate efforts realised during the past few years, to have a telecommunications infrastructure that can be accessed by all Mexicans, and integrated by the leading wired, wireless and satellite network technologies. Considering the adequate regulatory framework that promotes the development of this industry, the atmosphere for investment in Mexican telecommunications is favourable. Through private investment, new opportunities to create infrastructure and offer telecommunications services, which boasts of a telecommunications market worth an estimated US$ 10 billion in 1997 and US$ 17 billion in 1999.