What is the investment landscape in Mexican telecoms?

While short-term hesitation exists due to political uncertainty and global economic shifts, the medium-to-long-term outlook remains highly promising - particularly as Mexico strengthens its role as a regional tech and industrial hub. Currently, the telecommunications industry in Mexico is going through a complex period. With big regulatory changes like the elimination of the IFT (The Federal Telecommunicaitons Institute), and the closeness of the federal government to the industry is creating uncertainty around where investors will direct their capital within the sector.

The combined investment of Izzi Telecom, Megacable, Telmex, and Totalplay for the year 2024 amounted to 38.349 billion pesos, approximately 1.8928 billion U.S. dollars for that year, and was only 0.7% higher than the investment level of these four companies in 2023. These four companies also operate an estimated 600,000 kilometers of fixed telecommunications networks with fiber optics, including transport networks, metropolitan rings, and last-mile connections - an infrastructure that is also used at times to support mobile service providers, which in turn serve around 130 million mobile lines. This highlights the importance of the investments made by Izzi Telecom, Megacable, Telmex, and Totalplay.

Red Compartida is Mexico’s wholesale-only mobile network, launched to expand broadband access and increase competition in the telecom sector. Operated by Altán Redes through a public-private partnership, it uses the 700 MHz band for broad, efficient coverage. It allows telecom providers to offer services without building their own infrastructure, lowering entry barriers and fostering innovation. The project attracted significant foreign investment, including infrastructure funds and Chinese financing. Despite financial challenges and a partial government intervention in 2022, Red Compartida remains central to Mexico’s digital inclusion goals, offering both opportunity and risk for investors in the evolving telecommunications landscape.

The privileged position of CFE and Altán Redes is raising concerns among small internet providers in remote areas, who fear for the sustainability of their operations and the local jobs they support. Organizations like WispMx, which represents 244 members across 330 communities, argue that family-run operators not only provide connectivity but also stimulate local economies by launching small businesses and independently maintaining their networks. However, the close ties between CFE and Altán have led to market asymmetries, especially since Altán stopped paying for spectrum usage, while competitors like Telcel and AT&T still contribute a significant portion of their revenue to this cost.

Some emphasize that Mexico is at a crossroads, with new regulatory institutions potentially emerging. These entities must ensure a level playing field and provide a stable environment that encourages private investment in network expansion. Without robust regulation, the long-term sustainability of a competitive telecom landscape, especially in underserved areas, may be at risk.

On the financing side, long-haul connectivity projects are being backed by institutions like Banco Mexicano de Comercio Exterior (Bancomext). The public development bank sees telecom infrastructure as key to social and economic progress. Companies like Evengroup are benefiting from this vision, with new builds aimed at bridging regional gaps in digital access and enabling broader economic participation. Mexico is leading AI growth in Latin America, with a 965% increase in AI adoption across industries - underscoring the need for faster, more resilient networks. For Mexico to lead responsibly, connectivity investment must prioritize inclusivity and digital sovereignty alongside growth.