Last July 5, 2014 the Senate approved several secondary laws related to the telecommunications sector, followed by the approval by the House of Representatives on July 8, 2014. On July 14, President Enrique Peña Nieto approved and published the Federal Telecommunications and Broadcasting Law and the Public Broadcasting System of the Mexican State Law, among other amendments, additions and derogations to several provisions in telecommunications and broadcasting areas.
These secondary laws follow the recent Constitutional Amendments on Telecommunications and Broadcasting, which aim to promote competition and consumer welfare, comply with the Digital Agenda, fulfill the digital technologies transition in radio and television, achieve universal coverage, accelerate the use and integration of information technologies on a daily basis, as well as restraint and punish monopolistic and anti-competitive practices.
Progress in the telecommunications sector in Mexico
The guiding principles of the Reform and the secondary telecommunications law are the following:
- Equal competition as the main principle, allowing up to 100% direct foreign investment in telecommunication and satellite communications. Likewise, authorization up to 49% foreign direct investment in broadcasting, subject to reciprocity rules with the country where the investor is located;
- Limitation and control of services providers regarding long distance and roaming collections;
- Requirement of certain minimum standards of competence and quality in rates and rules of interconnection between competitors, including sharing passive infrastructure;
- Radio spectrum is regulated in a single body of law that includes networks and services in a convergent manner, with a unique concession title for any kind of services;
- Asymmetric regulation will be implemented to preponderant economic agents declared as such by the regulator;
- The law recognizes portability rights for end users when changing operator; portability procedures shall be defined by regulator with certain service and quality minimums;
- The recently created Federal Telecommunications Institute (“IFT”) will be the regulator responsible for monitoring, prosecuting and punishing those operators who violate the legal provisions regarding telecommunications, broadcasting and antitrust issues.
As a consequence of the aforementioned, the law provides different procedures that allow companies with less market presence to invest and promote competition within the sector, resulting in a better quality of services for consumers.
Several interesting and potential business opportunities exist to a market (of over 120 million Mexicans) that is structurally opening for the first time to local and foreign competition. Secondary legislation measures are aimed to achieving a competitive market for the benefit of consumers.