Telecomm & BroadcastingRegulation in MexicoAlexis MiloFederal Telecommunications Commission - MexicoHarvard Kennedy School...
IndexI. Market Overview & Regulation• Fixed Telephony• Mobile Telephony• Broadband• Over-the-Air TV• Pay-TVII. Telecomm & ...
3Source: ITU.Fixed Telephony Market Shares(% of total subscribers)Market Overview: Fixed TelephonySource: COFETEL.Fixed Te...
• Key Issueso Declining technologyo Concentration (double vs. triple play)o Valuable networks for new services/rights of w...
5Source: ITU.Mobile Telephony Market Shares(% of total subscribers)Market Overview: Mobile TelephonySource: COFETEL.Mobile...
6Source: Analysys Mason, Euromonitor, Wireless Intelligence.Mobile Telephony Penetration in Households(as classified by in...
• Key Issueso Decelerated penetrationo Concentrationo High SIM/User ratio → room for growth• Key Policieso 2010 Spectrum a...
8Source: OECD.Broadband Penetration in OECD Countries, 1S2012(subscriptions per 100 inhabitants)11260153045SwitzerlandNeth...
9*/ Chile, Estonia, Israel and Slovenia are excluded due to lack of data for the relevant period.Source: OECD.Market Overv...
10Contribution to Internet Penetration Growth,2002 - 2010(percentage points)Internet Penetration Growth in Households,2002...
11Fixed Broadband Market Shares(% of total subscriptions)Market Overview: BroadbandMobile Broadband* Market Shares, 2012(%...
12Regulation: Broadband• Key Issueso Low penetration – room for growtho Mobile – opportunity to “leapfrog”• Key Policieso ...
13Market Overview: Over-the-Air TVTV Penetration in Households(national average, %)e/ Own estimation.Source: Own calculati...
14Source: Operators as cited by CIDE.Market Overview: Over-the-Air TVTV Rating Shares, 2010(%)Advertising Revenues Market ...
15*/ Own estimation.Source: Own calculations using INEGI data.Market Overview: Pay-TVPay-TV Penetration in Households(nati...
16Regulation: TV• Key Issueso Concentration in Over-the-Air and Pay-TVo Low Pay-TV penetrationo Convergence (double vs. tr...
IndexI. Market Overview & Regulation• Fixed Telephony• Mobile Telephony• Broadband• Over-the-Air TV• Pay-TVII. Telecomm & ...
Digital TV18Source: INEGI.Over-the-Air-Only TV Households, 2010(%)TV Accessibility by Technology, 2011(% of total househol...
19TV Network LicensingTV Penetrationin Households(national average, %)Commercial TV Network Coverage(locations*)*/ 136 loc...
20*/ Refers to the average of Argentina, Brazil, Chile, Colombia, Mexico, Peruand Central America (Costa Rica, Guatemala a...
21PC Penetration Growth in Households,2002 - 2010(percentage points)Open Broadband NetworkSource: Own calculations using I...
22Source: Based on Urzúa (2008).Household Expenditure(%)Average Mobile Prepaid Rate ChangeJan-11 – Dec-12(as classified by...
Reform Overview23Digital TVTV NetworkLicensingMust CarryMust OfferOpenNetworkAsymmetricRegulationFDIFixed Telephony x x xM...
Telecomm & BroadcastingRegulation in MexicoAlexis MiloFederal Telecommunications Commission - MexicoHarvard Kennedy School...
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Telecomm & broadcasting regulation in mexico (f)

  1. 1. Telecomm & BroadcastingRegulation in MexicoAlexis MiloFederal Telecommunications Commission - MexicoHarvard Kennedy School of GovernmentApril 18th, 2013
  2. 2. IndexI. Market Overview & Regulation• Fixed Telephony• Mobile Telephony• Broadband• Over-the-Air TV• Pay-TVII. Telecomm & Broadcasting Reform• Digital TV• TV Network Licensing• Must Carry – Must Offer• Open Broadband Network• Asymmetric Regulation2
  3. 3. 3Source: ITU.Fixed Telephony Market Shares(% of total subscribers)Market Overview: Fixed TelephonySource: COFETEL.Fixed Telephony Penetration(subscriptions per 100 inhabitants)1418222630354045502002200320042005200620072008200920102011DevelopedGlobalMexico70.88.613.47.32040608010020022003200420052006200720082009201020112012Telmex Axtel Others Cable Cos
  4. 4. • Key Issueso Declining technologyo Concentration (double vs. triple play)o Valuable networks for new services/rights of way• Key Policieso Number portabilityo Accounting standardso Asymmetric Regulation Master Interconnection Agreement → TV Local Loop Unbundlingo Fixed Termination Rate4Regulation: Fixed Telephony
  5. 5. 5Source: ITU.Mobile Telephony Market Shares(% of total subscribers)Market Overview: Mobile TelephonySource: COFETEL.Mobile Telephony Penetration(subscriptions per 100 inhabitants)69.918.97.43.82040608010020022003200420052006200720082009201020112012Telcel (AMX) Movistar (TEF)Iusacell-Unefón Nextel (NIHD)0204060801001201401602002200320042005200620072008200920102011Chile ArgentinaMexico BrazilColombia Peru
  6. 6. 6Source: Analysys Mason, Euromonitor, Wireless Intelligence.Mobile Telephony Penetration in Households(as classified by income decile, %)Market Overview: Mobile TelephonySource: Own calculations using INEGI data.Number of SIM Cards per Mobile User, 2011(ratio – SIMs / Users)2.30.00.51.01.52.02.5BrazilMexicoRussiaChileArgentinaPeruPolandItalyColombiaSpainUSACanadaAustraliaFranceUK0204060801002002 2004 2006 2008 2010Ist Decile National Average Xth Decile
  7. 7. • Key Issueso Decelerated penetrationo Concentrationo High SIM/User ratio → room for growth• Key Policieso 2010 Spectrum auctionso Number portabilityo Mobile Termination Rate7Regulation: Mobile Telephony
  8. 8. 8Source: OECD.Broadband Penetration in OECD Countries, 1S2012(subscriptions per 100 inhabitants)11260153045SwitzerlandNetherlandsDenmarkKoreaNorwayFranceIcelandGermanyUKBelgiumSwedenLuxembourgCanadaFinlandUSANewZealandJapanEstoniaSpainIsraelAustraliaAustriaSloveniaGreeceIrelandItalyPortugalHungaryCzechRep.PolandSlovakRep.ChileMexicoTurkeyFixed Average105704080120KoreaSwedenAustraliaFinlandDenmarkJapanNorwayUSANewZealandIcelandLuxembourgEstoniaIrelandUKNetherlandsCzechRep.PolandSwitzerlandAustriaIsraelSpainFranceCanadaGreeceGermanyPortugalSlovakRep.ItalySloveniaBelgiumChileTurkeyHungaryMexicoMobile AverageMarket Overview: Broadband
  9. 9. 9*/ Chile, Estonia, Israel and Slovenia are excluded due to lack of data for the relevant period.Source: OECD.Market Overview: BroadbandFixed Broadband Penetration Growth in OECD Countries*,2002 - 2012(subscriptions per 100 inhabitants)1122010203040SwitzerlandNetherlandsFranceNorwayUKDenmarkLuxembourgGermanyIcelandNewZealandBelgiumFinlandSwedenAustraliaJapanUSAGreeceSpainIrelandCanadaItalyHungaryPortugalAustriaCzechRep.KoreaPolandSlovakRep.MexicoTurkeyAverage
  10. 10. 10Contribution to Internet Penetration Growth,2002 - 2010(percentage points)Internet Penetration Growth in Households,2002 - 2010(percentage points)Source: Own calculations using INEGI data. Source: Own calculations using INEGI data.Market Overview: Broadband010203040I II III IV V VI VII VIII IX XIncome Decile 0 5 10 15NationalIIIIIIIVVVIVIIVIIIIXX
  11. 11. 11Fixed Broadband Market Shares(% of total subscriptions)Market Overview: BroadbandMobile Broadband* Market Shares, 2012(% of total subscriptions)*/ Includes smartphones & other devices (USB dongles, etc.).Source: COFETEL.Source: COFETEL.64.919.015.50.5Telcel (AMX) Movistar (TEF)Iusacell-Unefón Nextel (NIHD)65.418.79.76.202040608010020022003200420052006200720082009201020112012Telmex Cable Cos Axtel Others
  12. 12. 12Regulation: Broadband• Key Issueso Low penetration – room for growtho Mobile – opportunity to “leapfrog”• Key Policieso Backbone/Data transport (CFE, rights of way)o Social coverage programso 700 MHz and 2.5 GHz bands
  13. 13. 13Market Overview: Over-the-Air TVTV Penetration in Households(national average, %)e/ Own estimation.Source: Own calculations using INEGI data.93.534.40204060801002002 2004 2006 2008 2010 2012eOver-the-Air TV Pay-TV
  14. 14. 14Source: Operators as cited by CIDE.Market Overview: Over-the-Air TVTV Rating Shares, 2010(%)Advertising Revenues Market Shares, 2010(%)Source: LAMAC as cited by CIDE.68.331.20.4Televisa TV Azteca Others44.522.220.1 13.2Televisa TV Azteca Pay-TV Others
  15. 15. 15*/ Own estimation.Source: Own calculations using INEGI data.Market Overview: Pay-TVPay-TV Penetration in Households(national average, %)Pay-TV Subscriptions in Mexico(millions)Source: COFETEL.0123456720022003200420052006200720082009201020112012Cable Satellite (DTH) Microwave (MMDS)05101520253035402002 2004 2006 2008 2010 2012e
  16. 16. 16Regulation: TV• Key Issueso Concentration in Over-the-Air and Pay-TVo Low Pay-TV penetrationo Convergence (double vs. triple play)• Key Policieso Digital TV transitiono TV Network licensingo Must carry - Must offer
  17. 17. IndexI. Market Overview & Regulation• Fixed Telephony• Mobile Telephony• Broadband• Over-the-Air TV• Pay-TVII. Telecomm & Broadcasting Reform• Digital TV• TV Network Licensing• Must Carry – Must Offer• Open Broadband Network• Asymmetric Regulation17
  18. 18. Digital TV18Source: INEGI.Over-the-Air-Only TV Households, 2010(%)TV Accessibility by Technology, 2011(% of total households)Source: Own calculations using INEGI data.0102030405060708090I II III IV V VI VII VIII IX XIncome decile83.416.6Analog Digital
  19. 19. 19TV Network LicensingTV Penetrationin Households(national average, %)Commercial TV Network Coverage(locations*)*/ 136 locations (out of 153) from the TV Licensing Program.Source: Own estimation using COFETEL data.e/ Own estimation.Source: Own calculations using INEGI data.0204060801002002 2004 2006 2008 2010 2012eOver-the-Air TV BroadbandLoc: 35%Pop: 13%Loc: 64%Pop: 87%2 choicesMore than 2 choices
  20. 20. 20*/ Refers to the average of Argentina, Brazil, Chile, Colombia, Mexico, Peruand Central America (Costa Rica, Guatemala and Panama).Source: BofA-ML estimations & IBOPE Establishment Survey as reported by LAMAC.Pay TV Penetration, 2013(% of households)Must Carry – Must Offer020406080100CanadaUSAArgentinaColombiaChileMexicoBrazilLATAMAverage*
  21. 21. 21PC Penetration Growth in Households,2002 - 2010(percentage points)Open Broadband NetworkSource: Own calculations using INEGI data.0102030I II III IV V VI VII VIII IX XIncome DecileSource: As stated in the Reform proposal.700 MHz band2.5 GHz bandCFE assets (fiber)Open Broadband Network+
  22. 22. 22Source: Based on Urzúa (2008).Household Expenditure(%)Average Mobile Prepaid Rate ChangeJan-11 – Dec-12(as classified by “refill” amount*, %)*/ Includes “frequent numbers” and “bonus minutes”.Source: Own calculations based on operator’s data.-80-70-60-50-40-30-20-100$50 $100 $150 $200 $300Asymmetric Regulation7030Markets relatively competitiveMarkets with lesser competition
  23. 23. Reform Overview23Digital TVTV NetworkLicensingMust CarryMust OfferOpenNetworkAsymmetricRegulationFDIFixed Telephony x x xMobile Telephony x xBroadband x x x xOver-the-Air TV x x x xPay-TV x x x
  24. 24. Telecomm & BroadcastingRegulation in MexicoAlexis MiloFederal Telecommunications Commission - MexicoHarvard Kennedy School of GovernmentApril 18th, 2013

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