Mexico Telecom Sector Faces Major Change with New Digital Agency

The telecommunications sector in Mexico is on the verge of a significant transformation. This change is due to the proposed disappearance of the Federal Telecommunications Institute (IFT) and modifications to the Federal Telecommunications and Broadcasting Law. A preliminary draft outlines the creation of a new digital transformation agency that will take over the responsibilities of the IFT. This agency will have the power to grant concessions for providing telecommunications services.

One of the key changes is the possibility of the agency granting concessions through direct allocations. This mechanism will also include public entities, aiming to expedite concession processes and promote broader access to these services. As a result, companies like Altán Networks may stop operating exclusively as intermediaries and become direct telecommunications network operators. This measure seeks to simplify the process and increase access to telecommunications services.

The new concession scheme would allow companies such as Altán Networks to expand their role in the market. Currently, Altán Networks is responsible for the installation and operation of the shared network. With the proposed changes, the company could become an independent operator instead of an intermediary. This transformation could lead to improved coverage and access to telecommunications services in the country.

In relation to these changes, the IFT has authorized the participation of the Federal Electricity Commission (CFE) in Altán Networks. The CFE will indirectly acquire 23.08% of the company without gaining total control. Altán Networks is a wholesale concessionaire responsible for the shared network, a crucial infrastructure for telecommunications services, including telephony and mobile internet access. With the new regulation, the company could obtain a direct concession and operate without intermediaries, opening up new opportunities in the sector.

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The modifications to broadcasting concessions will also impact public entities. The digital transformation agency will be responsible for issuing authorizations, and public entities with commercial concessions can request conversion to public use concessions. The public bidding process will follow a protocol established in the law, ensuring transparency in the procedures. However, some specialists have expressed concerns about the possible effects of these changes on competition and media plurality.

The restructuring of the concessions system in telecommunications and broadcasting will mark a significant turning point in the sector. While the government seeks greater control over permit allocation and strengthening state actors, the impact on competition and technological innovation will be crucial in determining the success of these reforms.

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