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Telecoms Laws Set to Lift Net Usage in Mexico

Connecting to the internet – many people in the world might just take it for granted. After all, at the end of 2012 internet penetration had reached almost 84% of the population in the UK. But for people in Mexico, internet penetration is quite different. As of 2012, internet penetration in Mexico was under 37% and more startling is that number only accounts for 8% of the total population of 112 million people. So why has internet penetration been so sluggish in Mexico?

One answer to this question is that a few companies controlled much of the communications businesses in Mexico for decades. This problem is set to change in the near future with the Mexican government having signed into effect new telecommunication laws in June 2013. These laws are fashioned after the United States Federal Communication Commission laws. The new agency, Federal Telecommunications Institute, is designed to break down the monopolistic business practices sometimes associated with telecommunications and media companies in Mexico, thus allowing for more competition.

Currently, America Movil Telcel controls 68% of the cell phone market and America Movil Telmex controls 85% of fixed telephone lines used in Mexico. On the media side, Televisa is the most prominent player controlling nearly 70% of the broadcast television audience. The new laws will limit an entity to less than 50% market share. In addition, there were stipulations in the new law that will affect the radio airwaves and foreign investment will be allowed to increase to 100%, up from 49% before the new law.

With over half the people in Mexico living at, or under, the poverty line, the hope is that competition will help lower the cost of getting onto the internet which was the highest, according to an Organization for Economic Co-operation and Development report in 2012, at US$41 per month.

Even with the low internet penetration and financial disadvantages, the Mexican people are still connecting to the internet in one fashion or another and often via mobile devices. The socio-economic disadvantaged portion of Mexico’s population often use secondhand smartphones and Wi-Fi hotspots to gain Net access, thus swerving the need for a cellular data plan. Access to these hotspots is provided by fixed broadband providers to existing customers at no charge.

A study by eMarketer forecasts smartphone growth to be almost 100% in 2012, reaching 18 million people and jumping to 52.9 million people in 2017 – that projection would account for almost 44%.

With new laws in place to encourage competition, now telecoms companies will also need to be creative in finding ways around the lack of credit/debit cards in Mexico. In the end, benefits should reach everyone from the consumer to the potential new telecoms businesses that will be granted licences in the years to come.

 

Daniel James Shosky is a public historian and freelance writer residing on the island of Cozumel in Mexico. His writing passions are in historic preservation, social history, travel, technology and the environment.

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Daniel James Shosky

Daniel James Shosky is a public historian and freelance writer residing on the island of Cozumel in Mexico. His writing passions are in historic preservation, social history, travel, technology and the environment.

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