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2018: The Year of the Shared Network

2018: El año de la Red Compartida

Telecommunications, Media, and Technology / By Janeth Giordano Serna. Junior Associate – Telecommunications, Media, and Technology

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The beginning of 2018 brings with it new challenges and opportunities in telecommunications, among them, the start of one of the country’s most important telecommunications projects in the last few years: the Shared Wholesale Network. This project was tendered and awarded on December 2016 to Altán Redes, S.A.P.I. de C.V., who plans to start operating on March 31st of 2018, at the latest. Thus, significantly expanding market entry opportunities to new competitors and broadening the sector’s current participating services.

As a result of the strategy proposed by the Federal government in the 2013 Telecommunications Constitutional Reform, this project intends to contribute to the fulfillment of universal digital inclusion, through effective broadband and telecommunication services access in the country, under conditions of competition, quality, interconnection, convergence, continuity and free access.

For its implementation and deployment, a Public-Private Partnership Agreement was established. Through this agreement, the Federal Electricity Commission assigned a pair of fiber optic lines and the federal government awarded a concession of 90 MHz in the 700 MHz band —which was freed because of the transition to Digital Terrestrial Television.

red-compartida-2The network will operate by sharing all its infrastructure, and by the disaggregate sale of services and capacities offered by Altán Redes, applying non-discriminatory rates to concessionaires as well as to distributors. Therefore, as of March 31 of 2018 —the date on which the shared network must cover at least 30% of the aggregate national population— the concessionaires or distributors that desire to contract services or lease infrastructure or capacity in the areas covered by Altán Redes will be able to make such request through the Reference Offers that will be published, and which will have prior authorization from the Federal Telecommunications Institute.

This project has made Mexico a worldwide pioneer in the implementation of a wholesale network that will allow more people to access broadband services using 4G-LTE technology and paves the way for the implementation of 5G. This will aide in closing the existing digital gap, particularly in locations where traditional network operators do not have a great interest in deploying their infrastructure.

For the telecommunications sector, a greater competition can be anticipated, as well as an increase in operators in the country, especially among incoming MVNO´s (Mobile Virtual Network Operators). These operators will be able to hire services and capacity at wholesale prices, and will then be able to offer them to final users at competitive prices, focusing in specific niche markets. However, MVNO´s will not be the only ones who benefit, since concessionaires that currently have a telecommunications network installed will also be able to expand their services. They will be able to complement their services with triple or even quadruple play.

Without a doubt, the launch of the shared network will benefit telecommunications companies, as well as the public in general. Nevertheless, the true scale of the benefits of its development will not be seen and measured until the network reaches a 100% of offered coverage.

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Contact

For more information regarding this note, please contact any of the following BGBG members:

Janeth Giordano Serna
jgiordano@bgbg.mx