New telecom nationwide backbone network project to be launched in Mexico – Red Troncal

Bid process for domestic and international investment in the project

The 2013 amendments to the Mexican Constitution and Mexico's new Telecom Law require Mexico's federal government to build a nationwide fiber optic backbone network, which will be called the Red Troncal.

TELECOMM, a Mexican federal governmental agency entitled to administer and expand the state-owned public telecommunications networks (satellite, maritime or telegraph-based), will be in charge of organizing a bid process to allow domestic and international investment in the Red Troncal project, which will be composed of fiber optic strands owned by Mexico's electric utility company (CFE).

Construction and deployment of the fiber-optic network

The Red Troncal will be constructed employing indefeasible rights of use (IRUs) to use a pair of "dark" fiber-optic strands along CFE´s fiber-optic network, which covers more than 25,000 km of electric power transmission and distribution towers and access points to related passive infrastructure. TELECOMM and CFE initially agreed on 155 routes in the IRU Contract, which have 1,135 segments comprising 25,649.681 km.

When deployed, the Red Troncal will activate the dark fibers, allowing a higher percentage of the country's population to access fiber-optic services by enabling concessionaires and licensed resellers to offer broadband access services, promoting competition in locations served by only one fiber-optic operator and promoting services in underserved locations.

International investors invited and expected as in Red Compartida project

TELECOMM's intention is to organize an international public-private partnership competitive tender process for the Red Troncal project and, eventually, to enter into a public partnership agreement with the winning bidder.

This likely will be similar to Mexico's recent "Red Compartida" process and thus attractive to local, international and global institutional investors. Foreign investment is allowed for up to 100% of the capital stock of telecom companies in Mexico.