The government of Mexico has received its first bid to build a state-owned network from an unnamed consortium.
While the government has not yet issued a tender, it is reportedly looking to award a contract by mid-2015. A state-owned network was proposed as a means for further challenging the market dominance of America Movil. It is estimated that the network buildout could take as long as 10 years and require around $10 billion of investment.
The anonymous consortium has reportedly received advice from infrastructure firms including Alcatel-Lucent and Ericsson, and is aiming to secure investment as well as a partner within the industry. It is reportedly receiving assistance from the World Bank’s International Finance Corp private-sector investment arm.
Alcatel-Lucent and Ericsson have not commented on their involvement, although separately Huawei is reportedly keen to be involved in the network buildout. The Chinese firm is believed to be discussing the possibility with Mexican officials.
A state-owned network would allow Telefonica and Iusacell to improve their coverage without having to deploy more infrastructure, allowing them to provide a stronger challenge to America Movil. In addition, MVNOs could use the network, further boosting competition.
The Mexican government has introduced new legislation aimed at reducing America Movil’s dominance in the market. The Carlos Slim-controlled operator has a 70% mobile market share along with 80% of the fixed market, via its subsidiaries Telcel and Telmex.
Any company deemed to have a market share of over 50% can now be forced to sell assets by the country’s new regulator, IFT. America Movil is complying with this, and has courted numerous operating groups including China Mobile as it looks to sell up.