Country profile: Mexico

Mexico, as the second-largest telecom market in Latin America, is poised for significant developments amid ongoing investment and strategic shifts.

The anticipated rollout of 5G network means the market is poised for significant growth, after a difficult period for the industry, enhancing connectivity and stimulating economic development across the country.

Before that the country’s regulatory frameworks needs to stablise. Mexico’s lower house of Congress has proposed adjustments to a reform aimed at abolishing several regulatory bodies, including the telecommunications regulator IFT.

A key point of contention has arisen around the Federal Institute of Telecommunications’ (IFT) recent decision to initiate a significant 5G spectrum auction. The IFT-12 auction, initially seen as a major step forward, has been criticized as rushed by the current government, leading to plans to cancel the process. This has generated uncertainty within the sector and is seen as indicative of broader changes in telecommunications regulation, particularly with the impending closure of IFT and the transition of its functions to the Agency for Digital Transformation and Telecommunications.

Telefónica has recently taken a pivotal step by engaging to facilitate the sale of its Mexican operations, aiming for completion by mid-2025. This move aligns with Telefónica’s broader strategy to divest assets in Latin America, including potential sales in Argentina and a majority stake in its Colombian unit to Millicom. Meanwhile, America Movil has reported a 48% decline in its fourth-quarter net profit, largely due to foreign exchange losses. Despite this, the company added 2.1 million net post-paid customers, with strong performance in Ecuador and Central America, alongside 320,000 new broadband clients.

DigitalBridge, a major investor, has explored the sale of its towerco, Mexico Tower Partners, signalling potential shifts in ownership as market conditions evolve. This comes as the country gears up for widespread 5G deployment, which presents significant opportunities for new tenancies and infrastructure upgrades. Movistar’s strategic collaboration with AT&T, alongside Altán Redes’ restructuring, is reshaping the competitive landscape, aiming to boost network capabilities across both urban and industrial areas.

Despite Mexico’s vast population, the telecom sector continues to face challenges related to tower density, especially when considering subscriber demands. While Telcel, owned by América Móvil, has solidified its prominent position in the market, AT&T and Movistar are navigating strategic adjustments. Movistar’s transition into a mobile virtual network operator (MVNO), the shutdown of its 2G network, and its return of spectrum reflect significant operational changes that pose new challenges for telecom tower companies.

Altán Redes, having emerged from bankruptcy protection, continues to push forward with its open-access 4G network, which supports connectivity for over 100 MVNOs. Macquarie’s acquisition of an 18.29% stake in Altán Redes underscores investor confidence despite the company’s restructuring efforts.

The telecom landscape in Mexico continues to evolve, with notable tower companies such as American Tower and Phoenix Tower International actively expanding their portfolios. In addition, MX Towers has drawn significant attention with Ardian’s investment, the landscape continues to shift with companies like MX Towers and Movistar making strategic moves to consolidate assets. MX Towers acquired 200 towers and 1,800 km of metro fibre from Movistar, further solidifying its position in Mexico’s telecom market, which is preparing for an intense 5G rollout.

The mexican market is experiencing ongoing regulatory consultations surrounding multi-band 5G spectrum auctions, all of which highlight the industry’s dynamic nature. Despite the complexities posed by market consolidation and regulatory challenges, Mexico remains a crucial market for telecom investment, offering growth opportunities amid increasing demand for enhanced connectivity and digital services.

While political dynamics and security concerns continue to pose challenges for infrastructure deployment and operational strategies, network sharing agreements are becoming increasingly important in optimizing resources and reducing costs across Mexico’s diverse landscape. Despite these hurdles, the potential for growth remains substantial, particularly in expanding rural connectivity and improving service reliability. With an estimated 43,239 telecom towers serving over 127 million people, the country is on the cusp of significant technological transformation, driven by major tower companies such as American Tower, Mexico Tower Partners, Centennial Towers, Phoenix Tower International, and others. The sector is expected to flourish as 5G becomes a cornerstone of its future, attracting further investments and expanding Mexico’s digital infrastructure