How I Learned to Stop Worrying about Telecom and Love the Pact

This post is far from being a black humor political satire. In case you missed it, on December 3, 2012 members from 3 leading political parties signed the Pact for Mexico.

This Pact is a pre-agreement on backbone amendments to promote Mexico´s growing. In telecom, we find very interesting public policies that could boost that and other industries:

1. Anti-trust Agency (COFECO) will have authority for structural and functional separation of trusts.
2. Creation of special telecom and anti-trust courts.
3. Constitutional access to broadband.
4. New rules for challenging resolutions from Federal Telecom Agency (COFETEL) and COFECO.
5. COFETEL will be autonomous.
6. Comision Federal de Electricidad (CFE)´s Telecom Network will grow.
7. The Bands of 700 MHz and 2.5 GHz will be reorganized. 90 MHz of the 700 MHz Band will be used for wholesale.
8. There will be free internet acess in public spots and buildings.
9. Promotion of public and private investment in apps for telehealth, telemedicine and electronic patient records.
10. New policies for e-government, open government and open government data.
11. A bidding for new free-to-air TV will be launched with obligations of free must-carry and must-offer for CATVs.
12. Dominant firms of telephony and data will be subject to assimetric regulation for tariffs, combo offering and M&As.
13. Telecom Law will be updated and reorganized in one single estatute.
14. New policies for TV, radio, telephone and data will be implemented in parallel.
15. Most of these policies will be implemented as early as first quarter of 2013 and finishing implementation on 2015 or 2018.

The fact that all political parties pre-agree on amendments forsee a majority on the Congress and of course, a coordination with Peña Nieto´s Administration for implementing them. The new Administration also has shown pre-consent from Telmex and Televisa, biggest telecom and media companies in Mexico. No Supreme Court support has been shown yet, though.

Take it with a grain of salt, but there are some rumors about an amendment on current foreign investment limitations to fixed telephony and free-to-air TV to boost competition.

If you google telecom bills and policies, sure will find most of these items. The difference goes beyond the manifest majority of the Congress to promote competition in telecom, but the State declaring that will lead the telecom growing during next 6 years.

However, there are other pledges hidden for the untrained eye. Sales of Mexican telecom industry growing at a 15.1% pace and mobile broadband at 56.4% during third quarter of 2012, shows consumer is demanding the coming of big data.

In parallel, official information from Ministry of Economy shows that IT Industry has 32 clusters nationwide with 1340 companies. During last 10 years, the industry has grown 12.9% and the jobs 12% As such, there are 115,000 IT professionals graduated annually.

Have you stopped to think on the potential of this combo growing?

The Pact is in fact pushed and guaranteed by data consumer, who actually creates the IT and telecom jobs by paying for higher end services, but also by new era technologies that make hard for firms to keep market share without competing and innovating.

As Muhammad Ali once said “Impossible is temporary”. Today we are thinking on mobile broadband, while some are starting to foresee a hardware-less future based on the cloud with big data crossing across converging networks.

Mexico is paving the road for this. If you are smart enough you can grab a bit of business. If you are smarter, you will prepare yourself for a terabit. Just do not be foolished by technology, a business plan still will be required covering financial, tax, legal, IP, marketing and other traditional aspects of doing business. The Devil is in the details.

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